SC TO-T

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

SCHEDULE TO

(Rule 14d-100)

TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934

ElkCorp

(Name of Subject Company (Issuer))

CGEA INVESTOR, INC.

CGEA HOLDINGS, INC.

(Names of Filing Persons—Offerors)

Common Stock, par value $1.00 per share
(Title of Class of Securities)

287456107
(CUSIP Number of Class of Securities)

CGEA Holdings, Inc.
c/o The Carlyle Group
1001 Pennsylvania Avenue, NW, Suite 220 South
Washington DC 20004
(202) 729-5626
Attention: Glenn A. Youngkin
(Name, Address and Telephone Numbers of Person
Authorized to Receive Notices and Communications on Behalf of Filing Persons)

Copies to:

Paul S. Bird, Esq.
Debevoise & Plimpton LLP
919 Third Avenue
New York, NY 10022
(212) 909-6000

CALCULATION OF FILING FEE

Transaction Valuation*	Amount of Filing Fee*
$899,279,455.50	$	96,222.90

*The amount of the filing fee, in accordance with Rule 0-11 of the Securities Exchange Act of 1934, is calculated by multiplying the transaction valuation by 0.000107. For purposes of calculating the filing fee only, the transaction valuation was determined by multiplying the purchase price of $40.50 per share by the sum of (i) the 20,626,102 shares of common stock, par value $1.00 per share, of ElkCorp (the “Shares”), issued and outstanding as of January 12, 2007; (ii) the 1,338,365 Shares that are issuable on or prior to the expiration of this offer under outstanding stock options; and (iii) 239,964 Shares that are issuable on or prior to the completion of this Offer under outstanding Performance Share Awards.

¨ Check the box if any part of the fee is offset as provided by Rule 0-11(a)(2) of the Exchange Act and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid:	None
Form or Registration No.:	Not Applicable
Filing Party:	Not Applicable
Date Filed:	Not Applicable

¨ Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer:

¨ Check the appropriate boxes below to designate any transactions to which the statement relates.

ý third-party tender offer subject to Rule 14d-1.

¨ issuer tender offer subject to Rule 13e-4.

¨ going-private transaction subject to Rule 13e-3.

¨amendment to Schedule 13D under Rule 13d-2.

Check the following box if the filing is a final amendment reporting the results of the tender offer: ¨

(Continued on following pages)

SCHEDULE TO

     This Tender Offer Statement on Schedule TO (this “Schedule TO”) relates to the offer by CGEA Investor, Inc. (“Purchaser”), a Delaware corporation and wholly owned subsidiary of CGEA Holdings, Inc. (“Parent”), to purchase all outstanding shares of common stock, par value $1.00 per share (together with the Series A Participating Preferred Stock purchase rights, “Shares”), of ElkCorp, a Delaware corporation (the “Company”), at a price of $40.50 per Share, net to the seller in cash (subject to applicable withholding taxes), without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated January 18, 2007 (the “Offer to Purchase”) and in the related Letter of Transmittal (which, together with any supplements or amendments, collectively constitute the “Offer”), copies of which are attached as Exhibits (a)(1)(A) and (a)(1)(B) hereto, respectively. The information set forth in the Offer to Purchase and the related Letter of Transmittal is incorporated herein by reference with respect to the Introduction, Items 1-9 and Item 11 of this Schedule TO.

ITEM 1. SUMMARY TERM SHEET.

     The information set forth in the “Summary Term Sheet” in the Offer to Purchase is incorporated herein by reference.

ITEM 2. SUBJECT COMPANY INFORMATION.

     (a) The name of the subject company is ElkCorp. ElkCorp’s principal executive office is located at 14911 Quorum Drive, Suite 600, Dallas, Texas 75254. ElkCorp’s telephone number is (972) 851-0500.

     (b) This Tender Offer Statement on Schedule TO relates to Purchaser’s offer to purchase all outstanding Shares. According to the Company, as of January 12, 2007, there were 20,626,102 Shares issued and outstanding, there were outstanding options to purchase an aggregate of 1,338,365 Shares and there were 581,700 Shares underlying outstanding performance share awards of which 239,964 Shares are issuable on or prior to the completion of the Offer.

     (c) The information set forth in Section 6—“Price Range of the Shares” is incorporated herein by reference.

ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.

     The information set forth in Section 9—“Certain Information Concerning the Purchaser and its Affiliates” and Schedule I to the Offer to Purchase is incorporated herein by reference.

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ITEM 4. TERMS OF THE TRANSACTION.

     The information set forth in the Offer to Purchase is incorporated herein by reference.

ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.

     The information set forth in Sections 8, 9, 10 and 11—“Certain Information Concerning The Company,” “Certain Information Concerning the Purchaser and its Affiliates,” “Background of the Offer; Contacts with the Company” and “Purpose of the Offer; Plans for the Company” in the Offer to Purchase is incorporated herein by reference.

ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

     The information set forth in Sections 6, 7, 11, 13 and 14—“Price Range of the Shares,” “Effect of the Offer on the Market for the Shares; NYSE Listing; Margin Regulations; Exchange Act Registration,” “Purpose of the Offer; Plans for the Company”, “Dividends and Distributions” and “Certain Conditions to the Offer” in the Offer to Purchase is incorporated herein by reference.

ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

     The information set forth in Section 12—“Source and Amount of Funds” in the Offer to Purchase is incorporated herein by reference.

ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

     The information set forth in the Introduction and Sections 8, 9, 10 and 11—“Certain Information Concerning the Company,” “Certain Information Concerning the Purchaser and its Affiliates,” “Background of the Offer; Contacts with the Company” and “Purpose of the Offer; Plans for the Company” in the Offer to Purchase is incorporated herein by reference.

ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.

     The information set forth in Sections 10, 11 and 16—“Background of the Offer; Contacts with the Company,” “Purpose of the Offer; Plans for the Company” and “Certain Fees and Expenses” in the Offer to Purchase is incorporated herein by reference.

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ITEM 10. FINANCIAL STATEMENTS.

     Not applicable.

ITEM 11. ADDITIONAL INFORMATION.

     The information set forth in Section 15 — “Certain Legal Matters; Required Regulatory Approvals” and Item 7 — “Source and Amount of Funds or Other Consideration” in the Offer to Purchase is incorporated herein by reference.

ITEM 12. MATERIAL TO BE FILED AS EXHIBITS.

(a)(1)(A)	Offer to Purchase, dated January 18, 2007.
(a)(1)(B)	Letter of Transmittal.
(a)(1)(C)	Notice of Guaranteed Delivery.
(a)(1)(D)	Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees.
(a)(1)(E)	Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(1)(F)	Form of Letter to Participants in the Company’s Employee Stock Ownership Plan.
(a)(1)(G)	Trustee Direction Form.
(a)(1)(H)	Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(1)(I)	Text of press release issued by CGEA Investor, Inc., CGEA Holdings, Inc., and the Company on December 18, 2006.
(a)(1)(J)	Text of press release issued by the Company on January 16, 2007.
(a)(1)(K)	Form of summary advertisement, published January 18, 2007.
(a)(1)(L)	Text of press release issued by Parent and the Purchaser on January 18, 2007.

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(a)(1)(M)	Complaint by Call4U against the Company, its directors and Carlyle, filed December 19, 2006.
(a)(1)(N)	Complaint by William E. Wetzel against the Company, its directors and Carlyle, filed December 27, 2006.
(b)(1)(A)	Amended and Restated Equity Commitment Letter, dated January 15, 2007, from Carlyle Fund IV, L.P.
(b)(1)(B)	Amended and Restated Debt Commitment Letter, dated January 15, 2007, from Bank of America, N.A., Merrill Lynch Capital Corporation, Banc of America Securities LLC, General Electric Capital Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
(d)(1)(A)	Amended and Restated Agreement and Plan of Merger, dated as of January 15, 2007, among the Company, CGEA Investor, Inc. and CGEA Holdings, Inc.
(d)(1)(B)	Amended and Restated Confidentiality Agreement, dated as of October 11, 2006, among the Company, CGEA Investor, Inc., CGEA Holdings, Inc. and Carlyle Investment Management LLC.
(d)(1)(C)	Amended and Restated Guarantee from Carlyle Partners IV, L.P., dated January 15, 2007.
(g)	Not applicable.
(h)	Not applicable.

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SIGNATURE

     After due inquiry and to the best of their knowledge and belief, the undersigned hereby certify as of January 18, 2007 that the information set forth in this statement is true, complete and correct.

CGEA Holdings, Inc.
By:	/s/ GLENN A. YOUNGKIN
	Name: Glenn A. Youngkin
	Title: President
CGEA Investor, Inc.
By:	/s/ GLENN A. YOUNGKIN
	Name: Glenn A. Youngkin
	Title: President

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EXHIBIT
NO.	DESCRIPTION
(a)(1)(A)	Offer to Purchase, dated January 18, 2007.
(a)(1)(B)	Letter of Transmittal.
(a)(1)(C)	Notice of Guaranteed Delivery.
(a)(1)(D)	Letter to Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees.
(a)(1)(E)	Form of Letter to Clients for Use by Brokers, Dealers, Commercial Banks, Trust Companies and Nominees.
(a)(1)(F)	Form of Letter to Participants in the Company’s Employee Stock Ownership Plan.
(a)(1)(G)	Trustee Direction Form.
(a)(1)(H)	Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(1)(I)	Text of press release issued by CGEA Investor, Inc., CGEA Holdings, Inc., and the Company on December 18, 2006.
(a)(1)(J)	Text of press release issued by the Company on January 16, 2007.
(a)(1)(K)	Form of summary advertisement, published January 18, 2007.
(a)(1)(L)	Text of press release issued by Parent and the Purchaser on January 18, 2007.
(a)(1)(M)	Complaint by Call4U against the Company, its directors and Carlyle, filed December 19, 2006.
(a)(1)(N)	Complaint by William E. Wetzel against the Company, its directors and Carlyle, filed December 27, 2006.
(b)(1)(A)	Amended and Restated Equity Commitment Letter, dated January 15, 2007, from Carlyle Fund IV, L.P.

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EXHIBIT
NO.	DESCRIPTION
(b)(1)(B)	Amended and Restated Debt Commitment Letter, dated January 15, 2007, from Bank of America, N.A., Merrill Lynch Capital Corporation, Banc of America Securities LLC, General Electric Capital Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated.
(d)(1)(A)	Amended and Restated Agreement and Plan of Merger, dated as of January 15, 2007, among the Company, CGEA Investor, Inc. and CGEA Holdings, Inc.
(d)(1)(B)	Amended and Restated Confidentiality Agreement, dated as of October 11, 2006, among the Company, CGEA Investor, Inc., CGEA Holdings, Inc. and Carlyle Investment Management LLC.
(d)(1)(C)	Amended and Restated Guarantee from Carlyle Partners IV, L.P., dated January 15, 2007.
(g)	Not applicable.
(h)	Not applicable.

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EX-99.(A)(1)(A)

Exhibit(a)(1)(A)

Offer to Purchase for Cash
All Outstanding Shares of Common Stock
(including the Associated Series A Participating Preferred Stock Purchase Rights)
of
ElkCorp
at
$40.50 Net Per Share in Cash
by

CGEA Investor, Inc.
a wholly owned subsidiary of

CGEA Holdings, Inc.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON FEBRUARY 14, 2007 UNLESS THE OFFER IS EXTENDED.

CGEA Investor, Inc. (“Purchaser”), a Delaware corporation and wholly owned subsidiary of CGEA Holdings, Inc. (“Parent”), is offering to purchase for cash all outstanding shares of common stock, par value $1.00 per share (together with the Series A Participating Preferred Stock purchase rights (the “Rights”), the “Shares”), of ElkCorp, a Delaware corporation (the “Company”), at a price of $40.50 per Share, net to the seller in cash (subject to applicable withholding taxes), without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated January 18, 2007 (the “Offer to Purchase”) and in the related Letter of Transmittal (which, together with any supplements or amendments, collectively constitute the “Offer”). The Offer is being made in connection with the Amended and Restated Agreement and Plan of Merger, dated as of January 15, 2007 among Parent, Purchaser and the Company (the “Merger Agreement”), pursuant to which, after the completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will be merged with and into the Company and the Company will be the surviving corporation (the “Merger”).

According to the Company’s public filing, the Company’s board of directors (the “Board”), upon the unanimous recommendation of a special committee of the Board (the “Special Committee”), has unanimously (with two directors who are senior executives of the Company abstaining) recommended that holders of Shares accept the Offer and tender their Shares pursuant to the Offer.

There is no financing condition to the Offer. The Offer is subject to various conditions. A summary of the principal terms of the Offer appears on pages 1 through 4.

The Dealer Manager for the Offer is Merrill Lynch & Co.

IMPORTANT

If you wish to tender all or any of your Shares prior to the expiration of the Offer, you should either (1) complete and sign the Letter of Transmittal (or a facsimile thereof) in accordance with the instructions in the Letter of Transmittal included with this Offer to Purchase, have your signature thereon guaranteed if required by Instruction 1 to the Letter of Transmittal, mail or deliver the Letter of Transmittal (or such facsimile thereof) and any other required documents to the Depositary for the Offer and either deliver the certificates for such Shares to the Depositary for the Offer along with the Letter of Transmittal (or a facsimile thereof), deliver such Shares pursuant to the procedures for book-entry transfers set forth in Section 3 of this Offer to Purchase or, if applicable, provide instructions to tender such Shares pursuant to the procedures for Shares held in the Company’s Employee Stock Ownership Plan (the “ESOP”) as set forth in Section 3 of this Offer to Purchase or (2) request your broker, dealer, commercial bank, trust company or other nominee to effect the transaction for you. If you have Shares registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you must contact such broker, dealer, commercial bank, trust company or other nominee if you desire to tender your Shares.

A stockholder who desires to tender Shares and whose certificates representing such Shares are not immediately available or who cannot comply with the procedures for book-entry transfer on a timely basis may tender such Shares by following the procedures for guaranteed delivery set forth in Section 3.

Any questions and requests for assistance may be directed to the Information Agent at its address and telephone number set forth on the back cover of this Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be obtained from the Information Agent.

THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT INFORMATION AND YOU SHOULD READ BOTH CAREFULLY AND IN THEIR ENTIRETY BEFORE MAKING A DECISION WITH RESPECT TO THE OFFER.

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Table of Contents

Page

SUMMARY TERM SHEET			1
INTRODUCTION			5
THE OFFER			7
	1.	TERMS OF THE OFFER	7
	2.	ACCEPTANCE FOR PAYMENT AND PAYMENT	9
	3.	PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES	9
	4.	WITHDRAWAL RIGHTS	12
	5.	CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER AND THE PROPOSED MERGER	13
	6.	PRICE RANGE OF THE SHARES	15
	7.	EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NYSE LISTING; MARGIN REGULATIONS; EXCHANGE ACT REGISTRATION	15
	8.	CERTAIN INFORMATION CONCERNING THE COMPANY	16
	9.	CERTAIN INFORMATION CONCERNING THE PURCHASER AND ITS AFFILIATES	18
	10.	BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY	18
	11.	PURPOSE OF THE OFFER; PLANS FOR THE COMPANY	21
	12.	SOURCE AND AMOUNT OF FUNDS	35
	13.	DIVIDENDS AND DISTRIBUTIONS	38
	14.	CERTAIN CONDITIONS TO THE OFFER	39
	15.	CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS	39
	16.	CERTAIN FEES AND EXPENSES	40
	17.	MISCELLANEOUS	41

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SUMMARY TERM SHEET

This summary term sheet highlights the material provisions of the Offer to Purchase and may not contain all the information that is important to you. This summary term sheet is not meant to be a substitute for the information contained in the remainder of this Offer to Purchase, and the information contained in this summary is qualified in its entirety by the fuller terms, descriptions and explanations contained in this Offer to Purchase and in the related Letter of Transmittal. The following are some of the questions you, as a stockholder of the Company, may have and answers to those questions. You are urged to carefully read this entire Offer to Purchase and the related Letter of Transmittal (which, together with any amendments or supplements thereto, constitute the “Offer”) before making any decision on whether to tender your Shares.

Unless the context requires otherwise, all references in this Summary Term Sheet to “Purchaser,” “we,” “us,” or “our” are to CGEA Investor, Inc.

Who is offering to purchase my Shares of the Company’s Common Stock?

•  Purchaser is offering to purchase your Shares. Purchaser was formed by Carlyle Partners IV, L.P. (“Sponsor”), an investment fund affiliated with The Carlyle Group, Inc., a global private equity firm, solely for purposes of entering into a transaction with, and acquiring control of, ElkCorp, a Delaware corporation (the “Company”), and consummating the Offer and the other transactions contemplated by the Amended and Restated Agreement and Plan of Merger dated as of January 15, 2007, among Purchaser, Parent and the Company (the “Merger Agreement”), including arranging the related financing transactions. Purchaser has not conducted any activities to date other than activities incidental to its formation and in connection with the transactions contemplated by the Merger Agreement. Purchaser was incorporated in Delaware in December 2006.

•  See Section 9 for more information on Purchaser and its affiliates.

What are we seeking to purchase, at what price, and do I have to pay any brokerage or similar fees to tender?

•  We are offering to purchase all outstanding shares of common stock, par value $1.00 per share (together with the Series A Participating Preferred Stock purchase rights, “Shares”) at a price of $40.50 net per Share in cash (subject to applicable withholding taxes) (the “Offer Price”), without interest, upon the terms and subject to the conditions contained in this Offer to Purchase and in the related Letter of Transmittal. The proposed price of $40.50 per Share represents an approximate 61% premium over the Company’s closing price of the Shares on November 3, 2006 ($25.18 per Share), the trading day immediately preceding the Company’s announcement of its sale process.

•  If you are the record owner of your Shares and you tender your Shares to the Purchaser and its affiliates in the Offer, you will not have to pay any brokerage or similar fees. However, if you own your Shares through a broker or other nominee, your broker or nominee may charge you a fee to tender. You should consult your broker or nominee to determine whether any charges will apply.

•  See the Introduction and Section 16 for more information.

Why are we making the Offer?

•  We are making the Offer because we believe it is the most efficient method for obtaining control of, and acquiring the entire equity in, the Company. On December 18, 2006, we entered into an Agreement and Plan of Merger with the Company and Parent (the “Original Merger Agreement”) pursuant to which we intended to acquire the outstanding shares of the Company in a one-step merger that would have required the affirmative vote of a majority of the Company’s shareholders. Under the new Merger Agreement, we are required to commence the Offer as the first step in our plan to acquire all the outstanding Shares, pursuant to which, after the completion of the Offer and the satisfaction or waiver of certain conditions, we will be merged with and into the Company and the Company will be the surviving corporation (the “Merger”). Our revised two-step structure allows shareholders to receive consideration for their Shares more promptly.

•  See the Introduction and Section 11 for more information.

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If I tender my Shares, will I continue to receive cash dividends declared and paid by the Company?

•  If you validly tender your Shares to the depositary as described below, you will still retain ownership of your Shares until such time as the Offer is successfully consummated and we accept your Shares for payment. As a result, until such time as the Offer is successfully completed and we accept your Shares for payment, you will still be entitled to receive any regular cash dividends applicable to your Shares that the Company declares and pays prior to such completion. See Section 13 for more information.

How long do I have to decide whether to tender into the Offer?

•  You have until the expiration of the Offer to tender your Shares. The Offer currently is scheduled to expire at midnight, New York City time, on February 14, 2007. If the Offer is extended, we will issue a press release announcing the extension on or before 9:00 a.m., New York City time, on the first business day following the date on which the Offer was scheduled to expire.

•  The Offer may also be extended through a subsequent offering period after the completion of a purchase of Shares tendered in the Offer, assuming satisfaction of the Minimum Condition (described below). A subsequent offering period is an additional period of time beginning after we have completed the purchase of Shares tendered during the Offer, during which stockholders may tender, but not withdraw, their Shares and receive the same consideration paid in the Offer. We do not currently intend to provide a subsequent offering period. See Section 1 for more information.

What are the conditions to the Offer?

•  We are not obligated to purchase any tendered Shares if, as of the Expiration Date:

•  A number of Shares which represents more than one-half of the number of Shares outstanding on a fully diluted basis has not been validly tendered and not withdrawn prior to the expiration of the Offer (the “Minimum Condition”).

•  The Company shall not have in all material respects performed all obligations and complied with all covenants required by the Merger Agreement to be performed or complied with by it prior to the Expiration Date, and such failure to perform shall not have been cured prior to the Expiration Date.

•  There occurs and is continuing any “Company Material Adverse Effect” (as defined in the Merger Agreement).

•  A governmental entity shall have enacted, issued or entered any restraining order, injunction or similar order or legal restraint or prohibition which remains in effect that enjoins or otherwise prohibits consummation of the Offer or the Merger.

•  The Merger Agreement shall have been terminated by the Company, Purchaser or Parent in accordance with its terms.

•  Any of the representations and warranties of the Company shall not be true and correct in all respects as of the date upon which such representations and warranties must be true and correct except (subject to certain exceptions as specified in the Merger Agreement) where the failure to be so true and correct would not have, individually or in the aggregate, a Company Material Adverse Effect.

•  More information on the conditions to the consummation of the Offer may be found in the Introduction and Section 14.

Does the Purchaser have the financial resources to pay the purchase price in the Offer?

•  Yes. The Offer is not subject to any financing condition. The Purchaser has obtained financing commitments from Bank of America, N.A., Merrill Lynch Capital Corporation, General Electric Capital Corporation, Banc of America Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated and has received a commitment from the Sponsor to make an equity contribution to the Purchaser of up to $461.5 million to fund the purchase of the Shares in the Offer. See Section 12 for more information.

Can I tender Shares I hold indirectly through the Company’s Employee Stock Ownership Plan?

•  Yes. Participants (including beneficiaries and alternate payees) in ElkCorp’s ESOP are eligible to tender Shares held for their benefit in the ESOP. You will receive a Trustee Direction Form which includes directions on how to tender such

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Shares. Your directions must be received by the trustee of the ESOP by 12:00 noon, New York City time, on the business day prior to the expiration of the Offer. See Section 3 for more information.

Can I tender Shares I hold indirectly through the Company’s Employee Stock Purchase Plan or Peak Performance Contractor Program?

•  Yes. Participants in the Company’s Employee Stock Purchase Plan and Peak Performance Contractor Program (the “Purchase Plans”) are eligible to tender Shares they hold indirectly through such Purchase Plans. In order to tender their Shares, participants in the Purchase Plans must complete the Letter of Transmittal and deliver it to the Depository no later than two business days prior to the expiration of the Offer.

How do I accept the Offer and tender my Shares?

•  To tender your Shares, you must deliver the certificates representing your Shares, together with a completed Letter of Transmittal and any other documents required by the Letter of Transmittal, to Mellon Investor Services LLC, the depositary for the Offer, not later than the time the Offer expires. If your Shares are held in street name (i.e., through a broker, dealer or other nominee), the Shares can be tendered by your nominee through Mellon Investor Services LLC (the “Depositary”). If you hold your Shares through one of the Purchase Plans, you must deliver your Letter of Transmittal to the Depository no later than two business days prior to the expiration of the Offer. If you hold your Shares through the ESOP, you must instruct the trustee of the ESOP in accordance with the Trustee Direction Form by 12:00 noon, New York City time, on the business day prior to the expiration of the Offer. If you are unable to deliver any required document or instrument to the Depositary by the expiration of the Offer, you may gain some extra time by having a broker, a bank or other fiduciary that is an eligible institution guarantee that the missing items will be received by the Depositary within three New York Stock Exchange trading days. For the tender to be valid, however, the Depositary must receive the missing items within that three trading-day period. See Section 3 for more information.

If I accept the Offer, when will I get paid?

•  If the conditions to the Offer as set forth in the Introduction and Section 14 are satisfied and we consummate the Offer and accept your Shares for payment, you will receive a check in an amount equal to the number of Shares you tendered multiplied by $40.50 (subject to adjustment for applicable withholding taxes), promptly following expiration of the Offer. See Section 2 for more information.

Can I withdraw my previously tendered Shares?

•  You may withdraw all or a portion of your tendered Shares by delivering written, telegraphic or facsimile notice to the Depositary prior to the expiration of the Offer. Further, if we have not agreed to accept your Shares for payment by March 18, 2007, you can withdraw them at any time after that date until we do accept your Shares for payment. Once Shares are accepted for payment, they cannot be withdrawn. Participants in the Purchase Plans who wish to withdraw all or a portion of their tendered Shares must deliver written, telegraphic or facsimile notice of withdrawal to the Depository no later than two business days prior to the expiration of the Offer. Participants in the ESOP who wish to withdraw their shares must submit a new Trustee Direction Form indicating the withdrawal by 12:00 noon, New York City time, on the business day prior to the expiration of the Offer. See Section 4 for more information.

•  We do not currently intend to provide a subsequent offering period following the Offer. In the event that we elect to provide a subsequent offering period, no withdrawal rights will apply to Shares tendered during such subsequent offering period or to Shares tendered in the Offer and accepted for payment. See Section 1 for more information.

What does the board of directors of the Company think of the Offer?

•  According to the Company’s public filing, the Company’s board of directors, acting upon the unanimous recommendation of the Special Committee, has unanimously (with Thomas D. Karol and Richard A. Nowak abstaining) adopted resolutions: determining that the terms of the Offer, the Merger and the other transactions contemplated by the Merger Agreement are fair and in the best interests of the Company and its stockholders, and declaring it advisable, to enter into the Merger Agreement; (ii) approving the Merger Agreement and the consummation of the transactions contemplated thereby, including the Offer and the Merger; (iii) recommending that the stockholders of the Company tender their

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Shares in the Offer or otherwise approve the adoption of the Merger Agreement, if applicable, (iv) rendering the Rights and the limitations on business combinations contained in Section 203 of the DGCL and in Article Thirteenth of the Company’s Restated Certificate of Incorporation inapplicable to the Offer, the Merger Agreement and the transactions contemplated thereby; and (v) electing that the Offer and the Merger, to the extent of the board of directors’ power and authority and to the extent permitted by law, not to be subject to any “moratorium,” “control share acquisition,” “business combination,” “fair price” or other form of anti-takeover laws and regulations of any jurisdiction that may purport to be applicable to the Merger Agreement.

If I do not tender but the Offer is successful, what will happen to my Shares?

•  If the Offer is successful, we will own a sufficient number of Shares to cause the Merger to occur. Therefore, if the Offer is successful and you have not tendered your Shares (and have not exercised your appraisal rights, as described below), you will receive the same price per Share as you would have received had you tendered into the Offer, but you will not receive the Merger Consideration until after the Merger is consummated. If we do not acquire a sufficient number of Shares to cause the Merger to occur without a meeting of stockholders pursuant to Delaware’s short-form merger statute, remaining holders of Shares will not receive their Merger Consideration until the stockholder vote occurs and the Merger is thereafter completed.

Are appraisal rights available in either the Offer or the proposed Merger?

•  Appraisal rights are not available in the Offer. However, if the Merger is consummated, persons who are then stockholders of the Company will have certain rights under Section 262 of the General Corporation Law of the State of Delaware (the “DGCL”). Holders of Shares must properly perfect their right to seek appraisal under Delaware law in connection with the Merger in order to exercise appraisal rights. The value you would receive if you perfect appraisal rights could be more or less than the price per Share to be paid in the proposed Merger. See the Introduction for more information.

What are the U.S. federal income tax consequences of the Offer?

•  The receipt of cash by you in exchange for your Shares pursuant to the Offer or the Merger is a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local or foreign tax laws. In general, you will recognize, for U.S. federal income tax purposes, capital gain or loss equal to the difference between your adjusted tax basis in the Shares surrendered and the amount of cash you receive for those Shares. You should consult your tax advisor on the tax implications of tendering your Shares. See Section 5 for more information.

What is the market value of my Shares as of a recent date?

•  The proposed price of $40.50 per share represents an approximate 61% premium over the Company’s closing price on November 3, 2006 ($25.18 per share), the trading day immediately preceding the Company’s announcement of its sale process. You should obtain a recent quotation for your Shares before deciding whether or not to tender. See Section 6 for more information.

Whom can I call with questions?

•  You can call Innisfree M&A Incorporated, our Information Agent, toll-free at (888) 750-5834, or collect at (212) 750-5833 with any questions you may have.

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To the Holders of Shares of Common Stock of ElkCorp:

INTRODUCTION

CGEA Investor, Inc., a Delaware corporation (the “Purchaser”) and a wholly owned subsidiary of CGEA Holdings, Inc., a Delaware corporation (“Parent”), hereby offers to purchase all the outstanding shares of common stock, par value $1.00 per share (the “Shares”), of ElkCorp, a Delaware corporation (the “Company”), together with the associated Series A Participating Preferred Stock purchase rights (the “Rights”), issued pursuant to the Rights Agreement, dated as of July 7, 1998, between the Company and Mellon Investor Services, LLC, as Rights Agent (as amended, supplemented or otherwise modified from time to time, the “Rights Agreement”), at a price of $40.50 per share, net to the seller in cash (subject to applicable withholding taxes), without interest thereon (the “Offer Price”), upon the terms and subject to the conditions set forth in this Offer to Purchase and in the related Letter of Transmittal (which, together with any amendments or supplements thereto, constitute the “Offer”). Purchaser, Parent and the Company have entered into an Amended and Restated Agreement and Plan of Merger, dated as of January 15, 2007 (the “Merger Agreement”), pursuant to which, after the completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will be merged with and into the Company and the Company will be the surviving corporation (the “Merger”). Unless the context otherwise requires, all references to Shares include the associated Rights.

Tendering stockholders who are record owners of their Shares and tender directly to the Depositary (as defined below) will not be obligated to pay brokerage fees or commissions or, except as otherwise provided in Instruction 7 of the Letter of Transmittal, stock transfer taxes with respect to the purchase of Shares by the Purchaser under the Offer. Stockholders who hold their Shares through a broker or bank should consult such institution as to whether it charges any service fees. Tendering stockholders who own their Shares through the Company’s ESOP must complete a Trustee Direction Form and deliver such form to the trustee of the ESOP or otherwise submit their directions to the trustee in accordance with the Trustee Direction Form. The trustee of the ESOP will then tender Shares, as directed, directly to the Depositary. Purchaser will pay all charges and expenses of, as depositary (the “Depositary”) and Innisfree M&A Incorporated, as information agent (the “Information Agent”), incurred in connection with the Offer. See Section 16 for more information.

The Offer is subject to the conditions, among others, that (a) at the expiration of the Offer there shall have been validly tendered in the Offer and not properly withdrawn at least a majority of the total number of Shares (assuming exercise of all outstanding options and issuance of all Shares in respect of performance awards, whether or not vested or then exercisable) at that time (the “Minimum Tender Condition”), (b) the Company shall have in all material respects performed all obligations and complied with all covenants required by the Merger Agreement to be performed or complied with by it prior to the expiration date of the Offer, (c) there shall have been a “Company Material Adverse Effect” (as defined in the Merger Agreement), (d) a governmental entity shall not have enacted, issued or entered any restraining order, injunction or similar order or legal restraint or prohibition which remains in effect that enjoins or otherwise prohibits consummation of the Offer or the Merger, (e) the Merger Agreement shall not have been terminated by the Company, Purchaser or Parent in accordance with its terms and (f) all of the representations and warranties of the Company shall be true and correct except (subject to certain exceptions as specified in the Merger Agreement) where the failure to be so true and correct would not have, individually or in the aggregate, a Company Material Adverse Effect. See Section 14 for more information.

The Offer will expire at midnight, New York City time, on February 14, 2007, unless extended.

According to the Company’s public filing, the Company’s board of directors, upon the unanimous recommendation of the Special Committee, has unanimously (with two directors who are senior executives of the Company abstaining) recommended that holders of Shares accept the Offer and tender their Shares pursuant to the Offer.

For factors considered by the Company board of directors, see the Company’s Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”) filed with the Securities and Exchange Commission (the “SEC”) in connection with the Offer.

The Special Committee received an opinion, dated January 14, 2007, of Citigroup Global Markets Inc. (“Citigroup”), the Special Committee’s financial advisor, to the effect that, as of the date of such opinion and based upon and subject to the factors and assumptions set forth in such opinion, the consideration to be received in the Offer and the Merger, taken together, by holders of Shares (other than Parent, Purchaser and their respective affiliates) was fair, from a financial point of view, to such holders, and the Company’s board of directors received an opinion, dated January 14, 2007, of UBS Securities LLC (“UBS”),

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the board of directors’ financial advisor, to the effect that, as of the date of such opinion, and based upon and subject to the factors and assumptions set forth in such opinion, the consideration to be received in the Offer and the Merger, taken together by holders of Shares (other than Carlyle, Parent, Purchaser and their respective affiliates) was fair, from a financial point of view, to such holders. The full texts of Citigroup’s and UBS’ written opinions, each dated January 14, 2007, which describe the assumptions made, matters considered and limitations on the review undertaken, will be attached as exhibits to the Schedule 14D-9 to be filed with the SEC and mailed to the Company’s stockholders. Citigroup’s opinion was provided to the Special Committee for its information in its evaluation of, and UBS’ opinion was provided to the Company’s board of directors for its information in its evaluation of, the $40.50 per share cash consideration payable in the Offer and the Merger, taken together. These opinions relate only to the fairness of such cash consideration from a financial point of view, do not address any other aspect of the Offer or the Merger and are not intended to constitute, and do not constitute, a recommendation as to whether any stockholder should tender Shares in the Offer or as to any other actions to be taken by any stockholder in connection with the Offer or the Merger. Holders of Shares are encouraged to read the opinions carefully in their entirety.

The Offer is being made pursuant to the Merger Agreement, pursuant to which, after the consummation of the Offer and the satisfaction or waiver of certain conditions, the Merger will be effected. On the effective date of the Merger, each outstanding Share (other than Shares owned by Parent or Purchaser or any subsidiary of Parent or the Company or held in the treasury of the Company or held by stockholders who properly exercise appraisal rights under Delaware law) will by virtue of the Merger, and without action by the holder thereof, be canceled and converted into the right to receive an amount in cash, without interest, equal to the Offer Price (the “Merger Consideration”) upon surrender of the certificate formerly representing such Share. The Merger Agreement is more fully described in Section 11. Section 5 below describes the principal U.S. federal income tax consequences of the sale of Shares in the Offer and the Merger.

Consummation of the Merger is conditioned upon, among other things, the approval of the agreement of merger (as such term is used in Section 251 of the General Corporation Law of the State of Delaware (the “DGCL”)) set forth in the Merger Agreement by the requisite number of stockholders of the Company if required by the DGCL. Subject to the exception specified in the following paragraph, under the DGCL the affirmative vote of a majority of the outstanding Shares to adopt the agreement of merger is the only vote of any class or series of the Company’s capital stock that would be necessary to approve the Merger Agreement and the Merger at any required meeting of the Company’s stockholders. If, following the purchase of Shares by Purchaser pursuant to the Offer, Purchaser and its affiliates own more than a majority of the outstanding Shares, Purchaser will be able to effect the Merger without the affirmative vote of any other stockholders.

The DGCL provides that, if a corporation owns at least 90% of the outstanding shares of each class of a subsidiary corporation, the corporation holding such stock may merge such subsidiary into itself, or itself into such subsidiary, without any action or vote on the part of the board of directors or the stockholders of such other corporation (a “Short-Form Merger”). Pursuant to the Merger Agreement, in the event that following completion of the Offer, Purchaser owns at least 90% of the then outstanding Shares, including Shares acquired in any subsequent offering period and through any exercise of the Top-Up Option (as described below), Parent shall effect a Merger of Purchaser into the Company without a vote of Company stockholders if permitted to do so under the DGCL. See Section 15 for more information.

No appraisal rights are available in connection with the Offer, however, under the DGCL, stockholders who meet certain criteria and continue to own their Shares at the time of the Merger and have not voted in favor of the Merger, if applicable, will have appraisal rights in connection with the Merger. See Section 15 for more information.

This Offer to Purchase and the related Letter of Transmittal contain important information and both documents should be read carefully and in their entirety before any decision is made with respect to the Offer.

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THE OFFER

1.   TERMS OF THE OFFER.

Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of any such extension or amendment), the Purchaser will accept for payment and pay for all Shares validly tendered and not withdrawn on or prior to the Expiration Date in accordance with the procedures set forth in Section 4. The term “Expiration Date” means 12:00 midnight, New York City time, on February 14, 2007, (20 business days from the date of the Offer) unless Purchaser has extended the offering period of the Offer, in which case the term “Expiration Date” shall mean the latest time and date at which the offering period of the Offer, as so extended by Purchaser, will expire.

The Offer is conditioned upon, among other things, satisfaction of the Minimum Condition and the other conditions described in Section 14 — “Certain Conditions of the Offer.” Purchaser may terminate the Offer without purchasing any Shares if certain events described in Section 14 occur.

Purchaser has agreed that it will not, without the prior written consent of the Company, (i) decrease the Offer Price or change the form of consideration payable in the Offer, (ii) decrease the number of Shares sought to be purchased in the Offer, (iii) amend or waive satisfaction of the condition that more than 50% of the outstanding Shares be tendered pursuant to the Offer (the “Minimum Condition”), (iv) impose additional conditions to the Offer, (v) make any change in the Offer that would require an extension or delay of the then-current Expiration Date (other than an increase in the Offer Price), (vi) modify or amend the conditions to the tender offer (the “Tender Offer Conditions”) (other than to waive such Tender Offer Conditions, other than the Minimum Condition) or (vii) modify or amend any other term of the Offer, in the case of this clause (vii), in any manner (A) adverse to the holders of Shares or (B) which would reasonably be expected to result in, individually or in the aggregate, a Parent Material Adverse Effect (as defined in the Merger Agreement).

Purchaser will not terminate or withdraw the Offer other than in connection with the termination of the Merger Agreement in accordance with its terms. However, without the consent of the Company, Purchaser may extend the Expiration Date for any period required by applicable rules and regulations of the SEC or the NYSE applicable to the Offer or elect to provide a subsequent offering period for the Offer in accordance with Rule 14d-11 under the Exchange Act. Unless the Merger Agreement has been terminated in accordance with its terms, if at any scheduled Expiration Date the Tender Offer Conditions have not been satisfied or waived, Purchaser will extend the Offer and the Expiration Date to a date that is equal to or less than five business days after the previously scheduled Expiration Date. Purchaser will be under no obligation to extend the Offer beyond June 30, 2007. If the date of acceptance for payment (the “Acceptance Date”) occurs but Parent does not acquire at least 90% of the Shares, Purchaser will provide a subsequent offering period of not fewer than three and no more than fifteen business days. In such an event, Purchaser must immediately accept and promptly pay for all Shares tendered during the subsequent offering period in accordance with Rule 14d-11 under the Exchange Act. If the Purchaser elects to include a subsequent offering period, it will notify stockholders of the Company consistent with the requirements of the SEC.

If the Purchaser extends the Offer or if the Purchaser is delayed in its acceptance for payment of or payment (whether before or after its acceptance for payment of Shares) for Shares, or is unable to pay for Shares pursuant to the Offer for any reason, then, without prejudice to the Purchaser’s rights under the Offer, the Depositary may retain tendered Shares on behalf of the Purchaser, and such Shares may not be withdrawn except to the extent tendering stockholders are entitled to withdrawal rights as described in Section 4. However, the Purchaser’s ability to delay payment for Shares that the Purchaser has accepted for payment is limited by Rule 14e-1(c) under the Exchange Act, which requires that a bidder pay the consideration offered or return the securities deposited by or on behalf of stockholders promptly after the termination or withdrawal of the bidder’s offer.

Any extension, delay, termination, waiver or amendment of the Offer will be followed as promptly as practicable by public announcement thereof, and such announcement in the case of an extension will be made no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date. Without limiting the manner in which the Purchaser may choose to make any public announcement, subject to applicable law (including Rules 14d-4(d) and 14e-1(d) under the Exchange Act, which require that material changes be promptly disseminated to holders of Shares in a manner reasonably designed to inform such holders of such change), the Purchaser currently intends to make announcements regarding the Offer by issuing a press release.

If the Purchaser makes a material change in the terms of the Offer, or if it waives a material condition to the Offer, the Purchaser will extend the Offer and disseminate additional tender offer materials to the extent required by Rules 14d-4(d)(1),

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14d-6(c) and 14e-1 under the Exchange Act. The minimum period during which an Offer must remain open following material changes in the terms of the Offer, other than a change in price or a change in the percentage of securities sought or a change in any dealer’s soliciting fee, will depend upon the facts and circumstances, including the materiality of the changes. In contrast, a minimum 10-business day period from the date of such change is generally required to allow for adequate dissemination of new information to stockholders in connection with a change in price or, subject to certain limitations, a change in the percentage of securities sought or a change in any dealer’s soliciting fee. For purposes of the Offer, a “business day” means any day other than a Saturday, Sunday or a federal holiday, and consists of the time period from 12:01 a.m. through 12:00 midnight, New York City time.

If the Purchaser decides, in its sole discretion, to increase the consideration offered in the Offer to holders of Shares and if, at the time that notice of the increase is first published, sent or given to holders of Shares, the Offer is scheduled to expire at any time earlier than the expiration of a period ending on the tenth business day from, and including, the date that such notice is first so published, sent or given, then the Offer will be extended until at least the expiration of ten business days from the date the notice of the increase is first published, sent or given to holders of Shares.

IF, ON OR BEFORE THE EXPIRATION DATE, THE PURCHASER INCREASES THE CONSIDERATION BEING PAID FOR SHARES ACCEPTED FOR PAYMENT PURSUANT TO THE OFFER, SUCH INCREASED CONSIDERATION WILL BE PAID TO ALL STOCKHOLDERS WHOSE SHARES ARE PURCHASED IN THE OFFER, WHETHER OR NOT SUCH SHARES WERE TENDERED BEFORE THE ANNOUNCEMENT OF THE INCREASE IN CONSIDERATION.

The Offer.  The Merger Agreement provides that Parent will cause Purchaser to commence the Offer and that, upon the terms and subject to prior satisfaction or waiver of the conditions set forth in the Offer as described in Section 14 — “Certain Conditions of the Offer” (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), Purchaser will accept for payment, and pay for, all Shares validly tendered pursuant to the Offer and not withdrawn on or at the Expiration Date. Parent on behalf of Purchaser expressly reserves the right from time to time, and subject to certain conditions, to waive any Tender Offer Conditions (other than the Minimum Tender Condition) or increase the Offer Price. Pursuant to the Merger Agreement, Purchaser has agreed that it will not, and Parent will cause Purchaser not to, without the prior written consent of the Company, (i) decrease the Offer Price or change the form of consideration payable in the Offer, (ii) decrease the number of Shares sought to be purchased in the Offer, (iii) amend or waive satisfaction of the Minimum Condition, (iv) impose additional conditions to the Offer, (v) make any change in the Offer that would require an extension or delay of the then-current Expiration Date (other than an increase in the Offer Price), (vi) modify or amend the Tender Offer Conditions (other than to waive such Tender Offer Conditions, other than the Minimum Condition) or (vii) modify or amend any other term of the Offer, in the case of this clause (vii), in any manner (A) adverse to the holders of Shares or (B) which would reasonably be expected to result in, individually or in the aggregate, a Parent Material Adverse Effect.

Purchaser will not, and Parent will cause Purchaser not to, terminate or withdraw the Offer other than in connection with the termination of the Merger Agreement in accordance with its terms. However, without the consent of the Company, Purchaser may extend the Expiration Date for any period required by applicable rules and regulations of the SEC or the NYSE applicable to the Offer or elect to provide a subsequent offering period for the Offer in accordance with Rule 14d-11 under the Exchange Act. Unless the Offer and the Merger Agreement have been terminated in accordance with their terms, if at any scheduled Expiration Date the Tender Offer Conditions have not been satisfied or waived, Purchaser will, and Parent will cause Purchaser to, extend the Offer and the Expiration Date to a date that is not more than five business days after the previously scheduled Expiration Date. Purchaser will be under no obligation to extend the Offer beyond June 30, 2007. If the date of acceptance for payment (the “Acceptance Date”) occurs but Parent does not acquire at least 90% of the Shares, Purchaser will, and Parent will cause Purchaser to, provide a subsequent offering period of not less than three and no more than fifteen business days. In such an event, Purchaser must, and Parent will cause Purchaser to, immediately accept and promptly pay for all Shares tendered during the initial and the subsequent offering period for a number of days to be determined by Parent but in accordance with Rule 14d-11 under the Exchange Act. If the Purchaser elects to include a subsequent offering period, it will notify stockholders of the Company consistent with the requirements of the SEC.

THE PURCHASER DOES NOT CURRENTLY INTEND TO INCLUDE A SUBSEQUENT OFFERING PERIOD IN THE OFFER. UNDER RULE 14d-7(a)(2) UNDER THE EXCHANGE ACT, IN THE EVENT THAT THE PURCHASER SUBSEQUENTLY ELECTS TO INCLUDE A SUBSEQUENT OFFERING PERIOD, NO WITHDRAWAL RIGHTS WOULD APPLY TO SHARES TENDERED DURING SUCH SUBSEQUENT OFFERING PERIOD AND NO WITHDRAWAL RIGHTS WOULD APPLY DURING SUCH SUBSEQUENT OFFERING PERIOD WITH RESPECT TO

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SHARES TENDERED IN THE OFFER AND ACCEPTED FOR PAYMENT. THE SAME CONSIDERATION WILL BE PAID TO STOCKHOLDERS TENDERING SHARES IN THE OFFER OR IN A SUBSEQUENT OFFERING PERIOD, IF ONE IS INCLUDED.

The Purchaser reserves the right to transfer or assign to one or more of the Purchaser’s affiliates, in whole or from time to time in part, the right to purchase all or any portion of the Shares tendered in the Offer, but any such transfer or assignment will not relieve the Purchaser (or Parent) of its obligations under the Offer or prejudice the rights of tendering stockholders to receive payment for Shares validly tendered and accepted for payment pursuant to the Offer.

2.   ACCEPTANCE FOR PAYMENT AND PAYMENT.

Upon the terms and subject to the conditions of the Offer (including, if the Offer is extended or amended, the terms and conditions of the Offer as so extended or amended), as soon as practicable after the Expiration Date, the Purchaser will purchase, by accepting for payment, and will pay for, all Shares validly tendered and not withdrawn on or prior to the Expiration Date. See Introduction and Section 14 for more information. The Purchaser expressly reserves the right, in its sole discretion but subject to the applicable rules of the Commission, to delay acceptance for payment of, and thereby delay payment for, Shares if any of the conditions discussed in the Introduction has not been satisfied.

In all cases, payment for Shares purchased pursuant to the Offer will be made only after timely receipt by the Depositary of:

(1) the share certificates representing such Shares or timely confirmation (a “Book-Entry Confirmation”) of the book-entry transfer of such Shares (if such procedure is available), into the Depositary’s account at Mellon Investor Services LLC (the “Book-Entry Transfer Facility”), pursuant to the procedures set forth in Section 3;

(2) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent’s Message (as defined below) in connection with a book-entry transfer; and

(3) any other documents required by the Letter of Transmittal.

The term “Agent’s Message” means a message, transmitted by the Book-Entry Transfer Facility to, and received by, the Depositary and forming a part of a Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has received an express acknowledgment from the participant in the Book-Entry Transfer Facility tendering the Shares which are the subject of such Book-Entry Confirmation, that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and that the Purchaser may enforce such agreement against such participant.

For purposes of the Offer, the Purchaser will be deemed to have accepted for payment, and thereby purchased, Shares validly tendered and not withdrawn as, if and when the Purchaser gives oral or written notice to the Depositary of the Purchaser’s acceptance of such Shares for payment pursuant to the Offer. In all cases, upon the terms and subject to the conditions of the Offer, payment for Shares purchased pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for tendering stockholders for the purpose of receiving payment from the Purchaser and transmitting payment to validly tendering stockholders. Upon the deposit of funds with the Depositary for the purpose of making payments to tendering stockholders, the Purchaser’s obligation to make such payment shall be satisfied and tendering stockholders must thereafter look solely to the Depositary for payment of amounts owed to them by reason of the acceptance for payment of Shares pursuant to the Offer. UNDER NO CIRCUMSTANCES WILL INTEREST ON THE PURCHASE PRICE FOR SHARES BE PAID BY THE PURCHASER REGARDLESS OF ANY EXTENSION OF THE OFFER OR BY REASON OF ANY DELAY IN MAKING SUCH PAYMENT. The Purchaser will pay any stock transfer taxes incident to the transfer to it of validly tendered Shares, except as otherwise provided in Instruction 7 of the Letter of Transmittal, as well as any charges and expenses of the Depositary and the Information Agent.

3.   PROCEDURES FOR ACCEPTING THE OFFER AND TENDERING SHARES.

Valid Tender of Shares.  Except as set forth below, for Shares to be validly tendered pursuant to the Offer, either

(1) on or prior to the Expiration Date, (a) share certificates representing tendered Shares must be received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase, or such Shares must be tendered pursuant to the book-entry transfer procedures set forth below and a Book-Entry Confirmation must be received by the Depositary, (b) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent’s Message in connection with a book-entry transfer of Shares, must be received

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by the Depositary at one of such addresses and (c) any other documents required by the Letter of Transmittal must be received by the Depositary at one of such addresses, or

(2) the guaranteed delivery procedures set forth below must be followed if required.

THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND SOLE RISK OF THE TENDERING STOCKHOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

Company Employee Stock Ownership Plan.  In order for Shares to be tendered from the ESOP, ESOP participants (including beneficiaries and alternate payees) must direct the trustee of the ESOP to tender some or all of the Shares allocated to the participants’ account by completing the Trustee Direction Form in accordance with the form’s instructions and the separate letter to the participants in the ESOP by noon, New York City time on the business day prior to the expiration of the Offer. All documents furnished to stockholders generally in connection with the Offer will be made available to ESOP participants. Such ESOP participants may not use the Letter of Transmittal to direct the tender of Shares held under the ESOP, but instead, must use the Trustee Direction Form included with the separate instruction letter. If such ESOP participants also hold Shares outside of the ESOP, then they must use the Letter of Transmittal to tender Shares held outside of the ESOP and must direct the trustee of the ESOP in accordance with the Trustee Direction Form for Shares held under the ESOP. The trustee of the ESOP, or its nominee, may impose a participant deadline several days in advance of the expiration of the Offer in order for its timely tender to be administratively feasible. ESOP participants must submit their directions to the trustee using one of the methods set forth in the Trustee Direction Form for receipt by the trustee no later than 12:00 noon, New York City time, on the business day prior to the Expiration Date, or no Shares allocated to the participant’s account will be tendered. The trustee of the ESOP is required under the terms of the ESOP to maintain the confidentiality of any Trustee Direction Form submitted by an ESOP participant. The trustee will follow your instructions unless it is determined that to do so would violate The Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

Company Employee Stock Purchase Plan and Peak Performance Contractor Program.   In order for Shares to be tendered from the Purchase Plans, participants must complete the Letter of Transmittal and deliver it to the Depository no later than two business days prior to the expiration of the Offer. All documents furnished to stockholders generally in connection with the Offer will be made available to Purchase Plan participants. The administrator of the Purchase Plans, or its nominee, may impose a participant deadline several days in advance of the expiration of the Offer in order to make timely tender administratively feasible. Purchase Plan participants must submit their Letter of Transmittal for receipt by the Depository no later than two business days prior to the expiration of the Offer or no Shares held for the participant’s account will be tendered.

Book-Entry Transfer.  The Depositary will make a request to establish accounts with respect to the Shares at the Book-Entry Transfer Facility for purposes of the Offer within two business days after the date of this Offer to Purchase. Any financial institution that is a participant with the Book-Entry Transfer Facility may make book-entry delivery of Shares by causing the Book-Entry Transfer Facility to transfer such Shares into the Depositary’s account at the Book-Entry Transfer Facility in accordance with the Book-Entry Transfer Facility’s procedures. Although delivery of Shares may be effected through book-entry transfer into the Depositary’s account at the Book-Entry Transfer Facility, the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, with any required signature guarantees, or an Agent’s Message, and any other required documents must, in any case, be transmitted to and received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase on or prior to the Expiration Date, or the guaranteed delivery procedures set forth below must be complied with.

REQUIRED DOCUMENTS MUST BE TRANSMITTED TO AND RECEIVED BY THE DEPOSITARY AT ONE OF ITS ADDRESSES SET FORTH ON THE BACK COVER PAGE OF THIS OFFER TO PURCHASE. DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER FACILITY’S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.

Signature Guarantees.  No signature guarantee is required on the Letter of Transmittal if:

(1) the Letter of Transmittal is signed by the registered holder(s) (which term, for purposes of this Section, includes any participant in the Book-Entry Transfer Facility’s system whose name appears on a security position listing as the owner

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of the Shares) of Shares tendered therewith and such registered holder has not completed either the box entitled “Special Delivery Instructions” or the box entitled “Special Payment Instructions” on the Letter of Transmittal, or

(2) such Shares are tendered for the account of a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program (each, an “Eligible Institution” and, collectively, “Eligible Institutions”).

In all other cases, all signatures on Letters of Transmittal must be guaranteed by an Eligible Institution. See Instructions 1 and 6 to the Letter of Transmittal for more information. If the share certificates representing the Shares are registered in the name of a person other than the signer of the Letter of Transmittal, or if payment is to be made, or share certificates not tendered or not accepted for payment are to be returned, to a person other than the registered holder of the certificates surrendered, then the tendered share certificates representing the Shares must be endorsed or accompanied by appropriate stock powers, in either case signed exactly as the name or names of the registered holders or owners appear on the certificates, with the signatures on the certificates or stock powers guaranteed as aforesaid. See Instructions 1 and 6 to the Letter of Transmittal for more information.

If the share certificates representing the Shares are forwarded separately to the Depositary, such delivery must be accompanied by a Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees.

Guaranteed Delivery.  If a stockholder desires to tender Shares under the Offer and such stockholder’s share certificates are not immediately available or the procedures for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Depositary on or prior to the Expiration Date, such stockholder’s tender may be effected if all the following conditions are met:

(1) such tender is made by or through an Eligible Institution;

(2) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser, is received by the Depositary, as provided below, on or prior to the Expiration Date; and

(3) within three NYSE trading days after the date of execution of such Notice of Guaranteed Delivery (a) share certificates representing tendered Shares are received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase, or such Shares are tendered pursuant to the book-entry transfer procedures and a Book-Entry Confirmation is received by the Depositary, (b) the Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent’s Message in connection with a book-entry transfer of Shares, is received by the Depositary at one of such addresses and (c) any other documents required by the Letter of Transmittal are received by the Depositary at one of such addresses.

The Notice of Guaranteed Delivery may be delivered by hand to the Depositary, by facsimile transmission, or mailed to the Depositary and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery.

Notwithstanding any other provision hereof, payment for Shares accepted for payment pursuant to the Offer will in all cases be made only after timely receipt by the Depositary of:

(1) share certificates representing tendered Shares or a Book-Entry Confirmation with respect to all tendered Shares, and

(2) a Letter of Transmittal (or a facsimile thereof), properly completed and duly executed, together with any required signature guarantees, or an Agent’s Message in connection with a book-entry transfer of Shares and any other documents required by the Letter of Transmittal.

Accordingly, payment might not be made to all tendering stockholders at the same time, and will depend upon when share certificates representing, or Book-Entry Confirmations of, such Shares are received into the Depositary’s account at the Book-Entry Transfer Facility.

Backup U.S. Federal Income Tax Withholding.  See the discussion under the heading “Backup U.S. Federal Income Tax Withholding” in Section 5.

Appointment as Proxy.  By executing a Letter of Transmittal as set forth above, a tendering stockholder irrevocably appoints designees of the Purchaser as such stockholder’s attorneys-in-fact and proxies, in the manner set forth in the Letter of

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Transmittal, each with full power of substitution, to the full extent of such stockholder’s rights with respect to (a) the Shares tendered by such stockholder and accepted for payment by the Purchaser and (b) any and all non-cash dividends, distributions, rights or other securities issued or issuable on or after the date of this Offer to Purchase in respect of such tendered and accepted Shares. All such proxies shall be considered coupled with an interest in the tendered Shares. This appointment will be effective if, when and only to the extent that the Purchaser accepts such Shares for payment pursuant to the Offer. Upon such acceptance for payment, all prior proxies given by such stockholder with respect to such Shares and other securities will, without further action, be revoked, and no subsequent proxies may be given nor any subsequent written consents executed (and, if given or executed, will not be deemed effective). The designees of the Purchaser will, with respect to the Shares and other securities for which the appointment is effective, be empowered to exercise all voting and other rights of such stockholder as they, in their sole discretion, may deem proper at any annual, special, adjourned or postponed meeting of the Company’s stockholders, and the Purchaser reserves the right to require that in order for Shares or other securities to be deemed validly tendered, immediately upon the Purchaser’s acceptance for payment of such Shares, the Purchaser must be able to exercise full voting rights with respect to such Shares. See Section 14 for more information.

The foregoing proxies are effective only upon acceptance for payment of Shares pursuant to the Offer. The Offer does not constitute a solicitation of proxies, absent a purchase of Shares, for any meeting of the Company’s stockholders, which will be made only pursuant to separate proxy solicitation materials complying with the Exchange Act. See the Introduction, Section 14 and Section 17 for more information.

Determination of Validity.  All questions as to the form of documents and validity, eligibility (including time of receipt) and acceptance for payment of any tender of Shares will be determined by the Purchaser, in its sole discretion, whose determination will be final and binding on all parties. The Purchaser reserves the absolute right to reject any or all tenders determined by it not to be in proper form or the acceptance of or payment for which may, in the opinion of the Purchaser’s counsel, be unlawful. The Purchaser also reserves the absolute right to waive any defect or irregularity in any tender of Shares of any particular stockholder whether or not similar defects or irregularities are waived in the case of other stockholders without any effect on the rights of such other stockholders.

The Purchaser’s interpretation of the terms and conditions of the Offer (including the Letter of Transmittal and the instructions thereto) will be final and binding on all parties. No tender of Shares will be deemed to have been validly made until all defects and irregularities with respect to such tender have been cured or waived. None of the Purchaser or any of its affiliates or assigns, if any, the Depositary, the Information Agent or any other person will be under any duty to give any notification of any defects or irregularities in tenders or incur any liability for failure to give any such notification.

Other Requirements.  The Purchaser’s acceptance for payment of Shares tendered pursuant to any of the procedures described above will constitute a binding agreement between the tendering stockholder and the Purchaser upon the terms and subject to the conditions of the Offer.

4.   WITHDRAWAL RIGHTS.

Shares tendered under the Offer may be withdrawn at any time on or before the Expiration Date and, unless theretofore accepted for payment as provided herein, may also be withdrawn at any time after March 18, 2007 (or such later date as may apply if the Offer is extended). If the Purchaser extends the Offer, is delayed in its acceptance for payment of Shares or is unable to purchase Shares validly tendered under the Offer for any reason, then, without prejudice to the Purchaser’s rights under the Offer, the Depositary may nevertheless, on behalf of the Purchaser, retain tendered Shares, and such Shares may not be withdrawn except to the extent that tendering stockholders are entitled to withdrawal rights described in this Section 4. Any such delay will be accompanied by an extension of the Offer to the extent required by law.

For a withdrawal to be effective, a notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of this Offer to Purchase. Any such notice of withdrawal must specify the name of the person who tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the registered holder of the Shares to be withdrawn, if different from the name of the person who tendered the Shares. If share certificates evidencing Shares to be withdrawn have been delivered or otherwise identified to the Depositary, then, prior to the physical release of such certificates, the serial numbers shown on such certificates must be submitted to the Depositary and, unless such Shares have been tendered by an Eligible Institution, the signatures on the notice of withdrawal must be guaranteed by an Eligible Institution. If Shares have been delivered pursuant to the book-entry transfer procedures as set forth in Section 3, any notice of withdrawal must also

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specify the name and number of the account at the Book-Entry Transfer Facility to be credited with the withdrawn Shares and otherwise comply with the Book-Entry Transfer Facility’s procedures.

Withdrawals of Shares may not be rescinded. Any Shares properly withdrawn will be deemed not validly tendered for purposes of the Offer, but may be retendered at any subsequent time prior to the expiration of the Offer by following any of the procedures described in Section 3.

All questions as to the form and validity (including time of receipt) of notices of withdrawal will be determined by the Purchaser, in its sole discretion, whose determination will be final and binding on all parties. None of the Purchaser or any of its affiliates or assigns, if any, the Depositary, the Information Agent or any other person will be under any duty to give any notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give any such notification.

The Purchaser does not currently intend to provide a subsequent offering period following the Offer. In the event that the Purchaser subsequently elects to provide a subsequent offering period, no withdrawal rights will apply to Shares tendered during such subsequent offering period or to Shares tendered in the Offer and accepted for payment.

Participants in the Purchase Plans who wish to withdraw their Shares must deliver written, telegraphic or facsimile notice of withdrawal to the Depository in accordance with the instructions set forth above for receipt no later than two business days prior to the expiration of the Offer.

Participants in the ESOP who wish to withdraw their Shares must submit a new Trustee Direction Form indicating the withdrawal. However, the new Trustee Direction Form will only be effective if it is received by the trustee of the ESOP by 12:00 noon, New York City time, on the business day before the expiration of the Offer. Upon timely receipt of the new Trustee Direction Form, the old instructions will be deemed canceled. If such participants wish to later re-tender their Shares under the ESOP, then another, new Trustee Direction Form must be received by the trustee by 12:00 noon, New York City time, on the business day before the expiration of the Offer. While a participant may change its instructions as frequently as such participant desires pursuant to the procedure in this section, any changes to the participant’s instructions must be received by the trustee of the ESOP by 12:00 noon, New York City time, on the business day before the Expiration Date in order to be effective.

5.   CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES OF THE OFFER AND THE PROPOSED MERGER.

CIRCULAR 230 ADVISORY:  Any discussion of tax matters contained in this Offer to Purchase is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties that may be imposed under U.S. federal tax law. This Offer to Purchase was written to support the promotion or marketing of the Offer and the proposed Merger. Each taxpayer should seek advice based on the taxpayer’s particular circumstances from an independent tax advisor.

The following is a general discussion of certain material U.S. federal income tax consequences of the Offer and the proposed Merger. This discussion is limited to stockholders who hold their Shares as capital assets for U.S. federal income tax purposes and who will not own any Shares (directly, indirectly or through attribution) after the completion of the Offer and the Proposed Merger (the “Stockholders”). This discussion considers neither the specific facts and circumstances that may be relevant to a particular Stockholder nor any U.S. state and local or non-U.S. tax consequences of the Offer or the proposed Merger. This discussion does not address the U.S. federal income tax consequences to a Stockholder that, for U.S. federal income tax purposes, is a non-resident alien individual, a foreign corporation, a foreign partnership, or a foreign trust or estate. Moreover, this discussion does not address special situations, such as the following:

•  tax consequences to Stockholders who may be subject to special tax treatment, such as tax-exempt entities, dealers in securities or currencies, banks, other financial institutions or “financial services entities,” insurance companies, regulated investment companies, traders in securities that elect to use a mark-to-market method of accounting for their securities holdings, certain expatriates or former long-term residents of the United States or corporations that accumulate earnings to avoid U.S. federal income tax;

•  tax consequences to persons holding Shares as part of a hedging, integrated, constructive sale or conversion transaction or a straddle or other risk reduction transaction; and

•  tax consequences to partnerships (or other entities treated as partnerships for U.S. federal income tax purposes) or to persons who hold Shares through a partnership or similar pass-through entity.

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If a partnership or other entity treated as a partnership for U.S. federal income tax purposes holds Shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Such partners are urged to consult their tax advisors. This discussion is based upon current provisions of the Internal Revenue Code of 1986, as amended (the “Code”), existing and proposed regulations thereunder and current administrative rulings and court decisions, all as in effect on the date hereof. All of the foregoing are subject to change, possibly on a retroactive basis, and any such change could affect the continuing validity of this discussion.

STOCKHOLDERS OF THE COMPANY SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE SPECIFIC TAX CONSEQUENCES TO THEM OF THE OFFER AND THE PROPOSED MERGER, INCLUDING THE APPLICABILITY AND EFFECT OF U.S. FEDERAL, STATE, LOCAL AND FOREIGN INCOME AND OTHER TAX LAWS IN THEIR PARTICULAR CIRCUMSTANCES.

In General.  The receipt of cash pursuant to the Offer or the proposed Merger will be a taxable transaction for U.S. federal income tax purposes and, as a result, a Stockholder will recognize gain or loss equal to the difference between the amount of cash received in connection with the Offer or the proposed Merger and the aggregate adjusted tax basis in the Shares tendered by such stockholder and purchased pursuant to the Offer or converted into cash in the proposed Merger, as the case may be. Gain or loss will be calculated separately for each block of Shares tendered and purchased pursuant to the Offer or converted into cash in the proposed Merger, as the case may be. Gain or loss recognized by such stockholder will be a capital gain or loss, which will be long-term capital gain or loss if such stockholder’s holding period for the Shares exceeds one year. The use of capital losses for U.S. federal income tax purposes is limited.

Backup U.S. Federal Income Tax Withholding.  Under U.S. federal income tax laws, payments made in connection with the Offer and the proposed Merger may be subject to “backup withholding” at a rate of 28% unless a stockholder holding Shares:

•  timely provides a correct taxpayer identification number (which, for an individual stockholder, is the stockholder’s social security number) and any other required information, or

•  is a corporation or comes within certain other exempt categories and, when required, demonstrates this fact, and otherwise complies with applicable requirements of the backup withholding rules.

A stockholder that does not provide a correct taxpayer identification number may be subject to penalties imposed by the Internal Revenue Service.

To prevent backup withholding on payments made in connection with the Offer or the proposed Merger, each stockholder must timely provide the Depositary with his or her correct taxpayer identification number and certify under penalties of perjury that he or she is not subject to backup U.S. federal income tax withholding by completing the Substitute IRS Form W-9 included in the Letter of Transmittal. Stockholders of the Company should consult their own tax advisors as to their qualification for exemption from withholding and the procedure for obtaining the exemption. See Instruction 9 and the section entitled “Important Tax Information” of the Letter of Transmittal for more information. Backup withholding is not an additional tax. Any amounts withheld from a stockholder under the backup withholding rules described above will be allowed a refund or a credit against such stockholder’s U.S. federal income tax liability, provided the required information is furnished to the IRS on a timely basis.

Company Employee Stock Ownership Plan.  The exchange of Shares for cash by the trustee of the ESOP on behalf of participants in the ESOP will not be a taxable transaction for federal income tax purposes for either the ESOP or the participants.

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6.   PRICE RANGE OF THE SHARES.

The Shares are listed and traded principally on the NYSE under the symbol “ELK.” The following table sets forth, for the periods indicated, the reported high and low closing prices for the Shares on the NYSE as reported by Bloomberg, L.P.:

	High		Low
2004-2005:
First Quarter	$	28.00	$	20.25
Second Quarter		34.79		25.96
Third Quarter		40.64		31.75
Fourth Quarter		38.20		26.35
2005-2006:
First Quarter		36.83		28.39
Second Quarter		35.99		30.41
Third Quarter		36.88		32.67
Fourth Quarter		34.56		26.67
2006-2007:
First Quarter		29.27		23.47
Second Quarter		41.53		25.06
Third Quarter (through January 12, 2007)		40.65		39.50

On November 3, 2006, the last full trading day prior to the Company’s announcement of its sale process, the closing price per Share as reported on the NYSE was $25.18 per share. On January 12, 2007, the last full trading day prior to the announcement of the execution of the Merger Agreement, the closing price per share on the NYSE was $40.00 per share. According to the Company Form 10-K, as of July 31, 2006, the number of holders of record of the Shares was 880.

Stockholders are urged to obtain a current market quotation for the Shares.

7.   EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; NYSE LISTING; MARGIN REGULATIONS; EXCHANGE ACT REGISTRATION.

Effects of the Offer on the Market for the Shares.  The purchase of Shares pursuant to the Offer will reduce the number of Shares that might otherwise trade publicly and could adversely affect the liquidity and market value of the remaining Shares held by the public. The purchase of Shares pursuant to the Offer can also be expected to reduce the number of holders of Shares. We cannot predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price or marketability of the Shares or whether it would cause future market prices to be greater or less than the Offer Price.

NYSE Listing.  Depending upon the number of Shares purchased pursuant to the Offer, the Shares may no longer meet the requirements for continued listing on the NYSE. According to the NYSE’s published guidelines, the NYSE would consider delisting the Shares if, among other things, (1) the total number of holders of Shares fell below 400, (2) the total number of holders of Shares fell below 1,200 and the average monthly trading volume over the most recent 12 months was less than 100,000 Shares, (3) the number of publicly held Shares (exclusive of holdings of officers, directors and their families and other concentrated holdings of 10% or more) fell below 600,000, (4) the Company’s average global market capitalization over a consecutive 30-trading-day period was less than $25 million or (5) the average closing price per share was less than $1.00 over a consecutive 30-trading-day period. As of January 12, 2007 there were 20,626,102 Shares outstanding. According to the Company Form 10-K, as of July 31, 2006, the outstanding Shares were held by 880 holders of record. If, as result of the purchase of Shares in the Offer or otherwise, the Shares no longer meet the requirements of the NYSE for continued listing and the listing of the Shares is discontinued, the market for the Shares could be adversely affected.

If the NYSE were to delist the Shares, it is possible that the Shares would continue to trade on another securities exchange or in the over-the-counter market and that price or other quotations would be reported by such exchange or through the Nasdaq Stock Market or other sources. The extent of the public market therefor and the availability of such quotations would depend, however, upon such factors as the number of stockholders and/or the aggregate market value of such securities remaining at such

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time, the interest in maintaining a market in the Shares on the part of securities firms, the possible termination of registration under the Exchange Act as described below and other factors. Neither Parent nor Purchaser can predict whether the reduction in the number of Shares that might otherwise trade publicly would have an adverse or beneficial effect on the market price for or marketability of the Shares or whether it would cause future market prices to be greater or less than the Offer Price. Trading in the Shares will cease upon consummation of the Merger if trading has not ceased earlier as discussed above.

After completion of the Offer, the Company will be eligible to elect “controlled company” status pursuant to Rule 303A.00 of the NYSE, which means that the Company would be exempt from the requirement that its board of directors be comprised of a majority of “independent directors” and the related rules covering the independence of directors serving on the Nominating/Corporate Governance and Compensation Committee of the Company’s board of directors. The controlled company exemption does not modify the independence requirements for the Company’s Audit Committee. We expect Purchaser to elect “controlled company” status following completion of the Offer.

Margin Regulations.  The Shares are currently “margin securities” under the regulations of the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”), which has the effect, among other things, of allowing brokers to extend credit on the collateral of the Shares. As such, the Shares are subject to the rules, laws and regulations of 15 U.S.C 78g. Depending upon factors similar to those described above regarding listing and market quotations, following the Offer, it is possible that the Shares may no longer constitute “margin securities” for purposes of the margin regulations of the Federal Reserve Board, in which event the Shares could no longer be used as collateral for loans made by brokers.

Exchange Act Registration.  The Shares are currently registered under the Exchange Act. Such registration may be terminated upon application of the Company to the SEC if the Shares are not listed on a national securities exchange or quoted on the Nasdaq Stock Market and there are fewer than 300 record holders of the Shares. The termination of registration of the Shares under the Exchange Act would substantially reduce the information required to be furnished by the Company to holders of Shares and to the SEC and would make certain provisions of the Exchange Act, such as the short-swing profit recovery provisions of Section 16(b) of the Exchange Act, the requirement to furnish a proxy statement in connection with stockholders’ meetings pursuant to Section 14(a) of the Exchange Act, and the requirements of Rule 13e-3 under the Exchange Act with respect to “going-private” transactions, no longer applicable to the Company. See Section 11 for more information. In addition, “affiliates” of the Company and persons holding “restricted securities” of the Company may be deprived of the ability to dispose of such securities under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”). If registration of the Shares under the Exchange Act were terminated, the Shares would no longer be “margin securities” or be eligible for listing on the NYSE.

8.   CERTAIN INFORMATION CONCERNING THE COMPANY.

The information concerning the Company contained in this Offer to Purchase has been taken from or based upon documents and records on file with the SEC and other public sources and is qualified in its entirety by reference thereto. None of the Purchaser, its affiliates, the Information Agent or the Depositary can take responsibility for the accuracy or completeness of the information contained in such documents and records, or for any failure by the Company to disclose events which may have occurred or may affect the significance or accuracy of any such information but which are unknown to the Purchaser, its affiliates, the Information Agent or the Depositary, except to the extent required by law.

According to the Company’s public filings with the SEC, the Company was incorporated in the State of Delaware in 1965. The principal executive office of the Company is located at 14911 Quorum Drive, Suite 600, Dallas, Texas 75254-1491 and its telephone number is (972) 851-0500. The Company is a manufacturer of premium roofing products and composite building products, including laminated fiberglass asphalt shingles. The Company’s primary focus centers on three building products platforms: Premium Roofing Products, Composite Building Products and Specialty Fabric Technologies. It maintains one additional segment, Surface Finishes, which includes hard chrome and other finishes designed to extend the life of steel machinery components operating in abrasive environments.

Available Information.  The Company is subject to the informational filing requirements of the Exchange Act and, in accordance therewith, is required to file periodic reports, proxy statements and other information with the SEC relating to its business, financial condition and other matters. Such reports, proxy statements and other information can be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549, and at the SEC’s regional office located at 3 World Financial Center, Room 4-300, New York, New York 10281-1022. Information regarding the public reference facilities may be obtained from the SEC by telephoning 1-800-SEC-0330. The Company’s filings are also

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available to the public on the SEC’s Internet site (http://www.sec.gov). Copies of such materials also may be obtained by mail from the Public Reference Section of the SEC at 100 F Street, N.E., Washington, D.C. 20549 at prescribed rates. Copies of many of the items filed with the SEC and other information concerning the Company are available for inspection at the offices of the NYSE located at 20 Broad Street, New York, New York 10005.

Financial Forecasts.  In connection with the due diligence review of the Company by Parent and Purchaser, the Company provided to Parent and Purchaser non-public internal financial forecasts regarding its anticipated future operations for the 2007 and 2008 fiscal years. A summary of the internal financial forecasts provided to Parent and Purchaser is set forth below.

The internal financial forecasts were not prepared with a view toward public disclosure, nor were they prepared with a view toward compliance with published guidelines of the SEC, the guidelines established by the American Institute of Certified Public Accountants for preparation and presentation of financial forecasts, or generally accepted accounting principles. The summary of these internal financial forecasts is not being included in this Offer to Purchase to influence your decision whether to tender your shares in the Offer, but because these internal financial forecasts were made available by the Company to Parent and Purchaser.

These internal financial forecasts were based on numerous variables and assumptions that are inherently uncertain and may be beyond the control of the Company’s management. Important factors that may affect actual results and result in the forecast results not being achieved include, but are not limited to, the failure to develop competitive products; factors affecting pricing; fluctuations in demand; cost and availability of raw materials; equipment malfunctions; plant construction and repair delays; the failure to retain key management and technical personnel of the Company; adverse reactions to the Offer by customers, suppliers and strategic partners and other risks described in the Company’s report on Form 10-K filed with the Commission for the fiscal year ended June 30, 2006. In addition, the internal financial forecasts may be affected by the Company’s ability to achieve strategic goals, objectives and targets over the applicable period. The assumptions upon which the financial forecasts were based necessarily involve judgments with respect to, among other things, future economic, competitive and regulatory conditions and financial market conditions, all of which are difficult or impossible to predict accurately and many of which are beyond the Company’s control. The internal financial forecasts also reflect assumptions as to certain business decisions that are subject to change.

Accordingly, there can be no assurance that the projections will be realized, and actual results may vary materially from those shown. The inclusion of these internal financial forecasts in this Offer to Purchase should not be regarded as an indication that any of the Company, Parent or Purchaser or their respective affiliates, advisors or representatives considered or consider the internal financial forecasts to be predictive of actual future events, and the internal financial forecasts should not be relied upon as such. None of the Company, Parent or Purchaser or their respective affiliates, advisors or representatives can give you any assurance that actual results will not differ from these internal financial forecasts, and none of them undertakes any obligation to update or otherwise revise or reconcile the internal financial forecasts to reflect circumstances existing after the date such internal financial forecasts were generated or to reflect the occurrence of future events even in the event that any or all of the assumptions underlying the projections are shown to be in error. None of Parent nor Purchaser, nor, to the knowledge of Parent or Purchaser, the Company, intends to make publicly available any update or other revisions to these internal financial forecasts. None of the Company, Parent or Purchaser or their respective affiliates, advisors or representatives has made or makes any representation to any stockholder regarding the ultimate performance of the Company compared to the information contained in these internal financial forecasts or that forecasted results will be achieved. The Company has made no representation to Parent or the Purchaser, in the Merger Agreement or otherwise, concerning these internal financial forecasts.

These summary internal financial forecasts should be read together with the historical financial statements of the Company, which may be obtained in the manner described above under “Available Information.”

COMPANY PROJECTED FINANCIAL INFORMATION

	FY6/30/07		FY6/30/08
	($ in millions)
Revenues	$	854	$	1,140
Operating Income	$	72	$	112
Net Income	$	37	$	64

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9.   CERTAIN INFORMATION CONCERNING THE PURCHASER AND ITS AFFILIATES.

The Purchaser was formed by Carlyle Partners IV, L.P. (“Sponsor”) solely for purposes of entering into a transaction with, and acquiring control of, the Company and consummating the Offer and the other transactions contemplated by the Merger Agreement, including arranging the related financing transactions. Purchaser has not conducted any activities to date other than activities incidental to its formation and in connection with the transactions contemplated by the Merger Agreement. Purchaser was incorporated in Delaware in 2006. The address of the principal executive offices of Parent and Purchaser is c/o The Carlyle Group, 1001 Pennsylvania Avenue, NW, Suite 220 South, Washington DC 20004 and its telephone number is (202) 729-5626.

Purchaser is a direct and wholly owned subsidiary of Parent. Purchaser is affiliated with the Sponsor, a Delaware limited partnership, and The Carlyle Group, a global private equity firm.

The name, business address and telephone number, citizenship, present principal occupation and employment history of each of the directors, executive officers and control persons of the Purchaser and its affiliates are set forth in Schedule I hereto. None of the Purchaser, its affiliates, or, to the best of their knowledge, any of the persons listed in Schedule I hereto has, during the past five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). None of the Purchaser, its affiliates, or, to the best of their knowledge, any of the persons listed in Schedule I hereto has, during the past five years, been a party to any judicial or administrative proceeding (except for matters that were dismissed without sanction or settlement) that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws.

Except as set forth elsewhere in this Offer to Purchase (including Schedule I hereto), (i) none of the Purchaser or, to the knowledge of the Purchaser, any of the persons listed in Schedule I hereto, beneficially owns or has a right to acquire any Shares or any other equity securities of the Company, and (ii) none of the Purchaser or its affiliates, to the knowledge of the Purchaser or its affiliates, any of the persons or entities referred to in clause (i) above or any of their executive officers, directors or subsidiaries, has effected any transaction in the Shares or any other equity securities of the Company during the past 60 days.

Except as set forth elsewhere in this Offer to Purchase (including Schedule I hereto), (i) neither the Purchaser nor, to the knowledge of the Purchaser, any of the persons listed on Schedule I hereto, has any contract, arrangement, understanding or relationship with any other person with respect to any securities of the Company and (ii) during the two years prior to the date of this Offer to Purchase, there have been no transactions that would require reporting under the rules and regulations of the Commission between the Purchaser or any of its affiliates or, to the knowledge of the Purchaser or any of its affiliates, any of the persons listed in Schedule I hereto, on the one hand, and the Company or any of its executive officers, directors and/or affiliates, on the other hand.

Except as set forth elsewhere in this Offer to Purchase, during the two years prior to the date of this Offer to Purchase, there have been no contracts, negotiations or transactions between the Purchaser or any of the Purchaser’s affiliates or, to the knowledge of the Purchaser or any of its affiliates, any of the persons listed in Schedule I hereto, on the one hand, and the Company or its affiliates, on the other hand, concerning a merger, consolidation or acquisition, a tender offer or other acquisition of securities, an election of directors or a sale or other transfer of a material amount of assets.

10.   BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY.

Our affiliate, The Carlyle Group, is a global private equity firm that invests in a wide range of sectors, including U.S. industrial companies. During the spring and summer of 2006, Carlyle’s industrial group investigated several building products investment opportunities, particularly in the roofing sector. During the course of this search, Carlyle began to focus on ElkCorp as an investment opportunity.

In late July 2006, our representatives, with Merrill Lynch & Co. as financial advisor, contacted and met with Mr. Thomas Karol, the Company’s chairman and chief executive officer to explore our potential interest in possibly acquiring the Company, possibly in connection with a contemporaneous acquisition by Carlyle of another industry participant. On August 15, we sent to the Company a letter outlining potential terms of an acquisition of the Company at a price of $32.00 per share in cash, subject to due diligence and other conditions.

On September 18, we sent to the Company a letter reiterating our interest in a transaction at $32.00 per share in cash and indicating a willingness to increase our valuation based on due diligence. Over the course of the next several weeks, we were in contact with UBS, the Company’s financial advisor, regarding a potential transaction with the Company. At this time, we also

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indicated to the Company our potential interest in an acquisition of Atlas Roofing Corporation from Hood Companies, Inc. (“Hood”), in combination with a potential transaction involving the Company. During that period, we were notified that UBS would be conducting a competitive auction for the sale of the Company. On October 11, we executed a confidentiality and standstill agreement with the Company. On October 12, 2006, Hood executed a separate confidentiality and standstill agreement with the Company. At the Company’s request, on October 27, 2006, we submitted a revised preliminary proposal to acquire the Company at a range of $34 to $35 per share.

On November 6, the Company issued a press release announcing that the Company was engaged in a review of its strategic alternatives, which could include a possible merger or sale of the Company. Also, on November 6, Building Materials Corporations of America (“BMCA”) filed a Schedule 13D disclosing that it had acquired 10.36% of the Company’s Shares.

On November 8, we were informed by UBS that final proposals to acquire the Company would be requested in early December. Over the next several weeks, we and our advisors conducted due diligence on the Company, which included meetings with management, plant tours, access to an online data room and work with our advisors and the Company’s representatives. On November 16, BMCA amended its Schedule 13D to disclose that it had submitted a written proposal to the Company to acquired all of the Company’s Shares for a price of $35 per Share. On December 11, the deadline for submission of final bids, we submitted a proposal of $37.00 per share in cash, together with a mark-up of a draft merger agreement that had been provided to us on behalf of the Company.

On Wednesday, December 13, representatives of UBS contacted us to advise us that the Board had received bids that were too close to distinguish a clear winner and requested that we submit a revised offer by noon on Saturday, December 16. At that time, we were informed by UBS that we should not, prior to the December 16 deadline, seek to discuss post-closing employment opportunities or to negotiate the terms, if any, by which members of the Company’s management would invest in or be employed by the Company following an acquisition. Also on December 13, representatives of Wachtell, Lipton, Rosen & Katz, the Company’s legal advisor (“Wachtell Lipton”), contacted our legal advisors at Debevoise & Plimpton LLP (“Debevoise”) to discuss our markup of the merger agreement. Representatives of Debevoise and Wachtell Lipton spoke again on December 14 to discuss further comments on the merger agreement.

On December 16, a representative of UBS spoke with our representatives and communicated, among other things, currently-obtained information reflecting a weakness in the Company’s anticipated second fiscal quarter results. Notwithstanding this adverse information, at the December 16 deadline for submission of final bids, we submitted a revised offer of $38.00 per share in cash, together with committed financing and a revised merger agreement accommodating a significant majority of the Company’s previously expressed concerns.

Later on December 16, representatives of UBS and Wachtell Lipton contacted us and Debevoise to inform us of certain remaining issues with our bid and proposed form of merger agreement. On the morning of Sunday, December 17, Debevoise delivered a revised form of merger agreement and related documents in response to the Company’s comments.

According to the Company’s public filing, in the early evening of Sunday, December 17, the Board and the Special Committee determined to recommend and approve our proposed transaction, subject to acceptable resolution of certain open issues.

During the next several hours, our representatives spoke with the Company’s representatives and resolved the open merger agreement issues. We determined to proceed to finalize the transaction at the $38.00 price following discussions with representatives of UBS.

Late on Sunday evening, Debevoise provided Wachtell Lipton with a final, agreed form of merger agreement. According to the Company’s public filing, at a subsequently held meeting, the Special Committee, by unanimous vote of all of its members, approved the merger agreement and recommended that the full board of directors approve and adopt the merger agreement. According to the Company’s public filing, following receipt of this recommendation, the board of directors, by unanimous vote of all of its members (with Thomas D. Karol and Richard A. Nowak abstaining) adopted resolutions approving the execution, delivery and performance of the merger agreement and resolved to recommend that the shareholders of the Company vote to adopt the merger agreement.

Following the conclusion of the meeting of the board of directors, the parties executed the merger agreement. In the morning of December 18, we and the Company issued a press release announcing the transaction.

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On December 18, 2006, we also announced that we had entered into an agreement with Hood providing for a merger between Atlas Roofing Corporation, a wholly owned subsidiary of Hood, and CGEA Investors LLC, our other subsidiary.

Following December 18, our advisors began to prepare for the closing of the transaction, including by beginning work on a proxy statement for a shareholders meeting to approve the transaction and working on the documentation for the debt financing for the merger. On December 20, our representatives met in Dallas with members of the Company’s management to discuss our proposals for the participation of management and employees in the ownership of stock of the Surviving Corporation and other compensation-related matters. Following this meeting and prior to December 31, 2006, 17 members of management elected to defer receipt of Shares issuable with respect to certain of their performance shares (and defer taxation) to a date following consummation of the Offer and the Merger that such deferred amounts are ultimately settled. Under these elections, from the completion of the merger to the date that such deferred amounts are ultimately settled, subject to the manager’s execution of an equity rollover agreement with Parent, the deferred amounts will be deemed notionally invested in vested deferred capital stock of Parent. If no such agreement is entered into, the cash value of the performance shares (based on the per share amount payable pursuant to the Merger Agreement) will be paid to the manager in January 2008. The Company has advised us that Messrs. Karol, Nowak, Fisher, Kiik and Sisler and all executive officers as a group have elected to defer approximately 160,000, 26,316, 30,795, 8,815, 29,000 and 293,596 performance shares, respectively.

On December 20, 2006, BMCA commenced a tender offer for all the shares of the Company at a price of $40.00 per share by filing a Schedule TO with the SEC. On December 29, at the request of the Company, we consented to the Company entering into a confidentiality agreement with BMCA containing a standstill provision that was less restrictive than the standstill provision in our confidentiality agreement. In connection with providing our consent, we entered into an amended and restated confidentiality agreement with the Company that contained a standstill provision similar to the provision the Company agreed to with BMCA.

On January 8, the Company filed a Solicitation/ Recommendation Statement on Schedule 14D-9 with the SEC. In its Schedule 14D-9, the board of directors, on the recommendation of the Special Committee, recommended that Company’s shareholders reject the BMCA offer and not tender their Shares for the reasons stated in the Schedule 14D-9. The Company’s Schedule 14D-9 also disclosed that litigation had been filed in Delaware and Texas state courts against the Company and its directors alleging, among other things, breach of fiduciary duty in connection with the Company’s decision to enter into the Original Merger Agreement with us. We were also named as defendants in the litigation.

During the week of January 8, we discussed with our financial and legal advisors and our financing sources the possibility of improving the terms of our proposal by increasing the consideration per share and converting our Original Merger Agreement from a one-step merger into a two-step tender offer followed by a merger structure. We concluded that, in light of the pending BMCA offer and the advice we received from our financing sources and our other advisors, by proactively submitting an improved proposal, we could provide the Company’s shareholders with greater value for their Shares as quickly as possible and bring the process to a close.

On January 12, we sent to the Special Committee and its advisors a written proposal increasing our offer from $38.00 per share to $40.50 per share, together with a draft of an amended and restated merger agreement changing the structure of our offer to a tender offer. On January 13, we provided to the Company and its advisors revised commitment letters providing for fully committed financing for our tender offer. During the period from Saturday January 13 to Monday January 15, representatives of Debevoise and Wachtell Lipton negotiated a revised merger agreement to reflect the proposed tender offer structure.

At telephonic meetings on Sunday, January 14, the Company’s Special Committee and Board determined to recommend and approve our proposed transaction, subject to acceptable resolution of certain open issues. In the negotiations between Debevoise and Wachtell Lipton on January 14 and 15, these open issues were resolved in a manner acceptable to the Company’s Board and Special Committee. On January 15, the parties executed the Merger Agreement.

On the morning of January 16, we and the Company issued a press release announcing the transaction on the revised terms.

On January 18, BMCA, through a newly formed acquisition vehicle, commenced a new tender offer for the Shares at a price of $42 per Share. According to BMCA’s public filing, the new tender offer remains subject to substantially the same conditions as were applicable to the tender offer commenced by BMCA on December 20, 2006.

On January 18, 2007, we commenced the Offer.

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11.   PURPOSE OF THE OFFER; PLANS FOR THE COMPANY

Purpose of the Offer and Plans for the Company.  The purpose of the Offer and the Merger is for Parent, through Purchaser, to acquire control of, and the entire equity interest in, the Company. Pursuant to the Merger, Parent will acquire all of the capital stock of the Company not purchased pursuant to the Offer, the Top-Up Option (defined below) or otherwise. Stockholders of the Company who sell their Shares in the Offer will cease to have any equity interest in the Company or any right to participate in its earnings and future growth. If the Merger is consummated, non-tendering stockholders also will no longer have an equity interest in the Company. On the other hand, after selling their Shares in the Offer or the subsequent Merger, stockholders of the Company will not bear the risk of any decrease in the value of the Company. Assuming Purchaser purchases a majority of the Shares pursuant to the Offer, Parent is entitled to exercise its rights under the Merger Agreement to obtain pro rata representation on, and control of, the board of directors of the Company. See “The Merger Agreement — Directors” below.

Parent and Purchaser have not engaged in any transaction involving the Shares, other than entering into the Original Merger Agreement.

In accordance with the Merger Agreement, following the Offer, Parent will acquire the remaining Shares pursuant to the Merger. In the event that a sufficient number of Shares are tendered in the Offer to entitle us to purchase Shares pursuant to the Top-Up Option, we may acquire Shares pursuant to the Top-Up Option. Parent and its affiliates also reserve the right to dispose of any or all Shares acquired by them.

Except as otherwise provided herein, it is expected that following the Merger, the business and operations of the Company will be continued substantially as they are conducted currently. Parent will continue to conduct a detailed review of the Company and its assets, corporate structure, capitalization, operations, properties, policies, management and personnel during the pendency of the Offer. After the consummation of the Offer and the Merger, Parent will take such actions as it deems appropriate in light of the circumstances which then exist.

Except as disclosed in this Offer to Purchase, neither Purchaser nor Parent has any present plans or proposals that would result in an extraordinary corporate transaction involving the Company or any of its subsidiaries, such as a merger, reorganization, liquidation, relocation of operations, or sale or transfer of a material amount of assets, or any material changes in the Purchaser’s capitalization, corporate structure, business or composition of its management or board of directors.

Parent has entered into an Agreement and Plan of Merger, dated as of December 18, 2006 and amended as of January 15, 2007, with CGEA Investors LLC, a Delaware limited liability company and a direct wholly-owned subsidiary of Parent, Hood, Atlas Roofing Corporation, a Mississippi corporation and wholly-owned subsidiary of Hood (“Atlas”), and AT Merger LLC, a Delaware limited liability company and wholly-owned subsidiary of Hood, pursuant to which Atlas will become a wholly-owned subsidiary of Parent (together, the “Atlas Merger”). Parent expects the closing of the Atlas Merger to occur within 30 to 45 days following the closing of the Merger. Following the closing of the Atlas Merger, Parent intends to merge the Company and Atlas.

The Merger Agreement.  The following is a summary of certain provisions of the Merger Agreement. This summary is qualified in its entirety by reference to the Merger Agreement, which is incorporated herein by reference and a copy of which is filed as an exhibit to the Tender Offer Statement on Schedule TO that Parent and Purchaser have filed with the SEC (the “Schedule TO”). The Merger Agreement may be examined and copies may be obtained in the manner set forth in Section 8 under “Available Information.”

The description of the Merger Agreement has been included to provide you with information regarding its terms. The Merger Agreement contains representations and warranties made by and to the Company, Purchaser and Parent as of specific dates. The statements embodied in those representations and warranties were made for purposes of that contract among the parties and are subject to qualifications and limitations agreed by the parties in connection with negotiating the terms of that contract.

The Offer.  The Merger Agreement provides that Parent will cause Purchaser to commence the Offer and that, upon the terms and subject to prior satisfaction or waiver of the conditions set forth in the Offer as described in Section 14 — “Certain Conditions of the Offer” (including, if the Offer is extended or amended, the terms and conditions of any extension or amendment), Purchaser will accept for payment, and pay for, all Shares validly tendered pursuant to the Offer and not withdrawn on or at the Expiration Date. Purchaser expressly reserves the right, from time to time, and subject to certain

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conditions, to waive any Tender Offer Conditions (other than the Minimum Tender Condition) or increase the Offer Price. Pursuant to the Merger Agreement, Purchaser has agreed that it will not, and Parent will cause Purchaser not to, without the prior written consent of the Company, (i) decrease the Offer Price or change the form of consideration payable in the Offer, (ii) decrease the number of Shares sought to be purchased in the Offer, (iii) amend or waive satisfaction of the Minimum Condition, (iv) impose additional conditions to the Offer, (v) make any change in the Offer that would require an extension or delay of the then-current Expiration Date (other than an increase in the Offer Price), (vi) modify or amend the Tender Offer Conditions (other than to waive such Tender Offer Conditions, other than the Minimum Condition) or (vii) modify or amend any other term of the Offer, in the case of this clause (vii), in any manner (A) adverse to the holders of Shares or (B) which would reasonably be expected to result in, individually or in the aggregate, a Parent Material Adverse Effect.

Purchaser will, and Parent will cause Purchaser not to, terminate or withdraw the Offer other than in connection with the termination of the Merger Agreement in accordance with its terms. However, without the consent of the Company, Purchaser may extend the Expiration Date for any period required by applicable rules and regulations of the SEC or the NYSE applicable to the Offer or elect to provide a subsequent offering period for the Offer in accordance with Rule 14d-11 under the Exchange Act. Unless the Offer and the Merger Agreement has been terminated in accordance with their terms, if at any scheduled Expiration Date the Tender Offer Conditions have not been satisfied or waived, Purchaser will, and Parent will cause Purchaser to, Purchaser will extend the Offer and the Expiration Date to a date that is not more equal to than five business days after the previously scheduled Expiration Date. Purchaser will be under no obligation to extend the Offer beyond June 30, 2007. If the date of acceptance for payment (the “Acceptance Date”) occurs but Parent does not acquire at least 90% of the Shares, Purchaser, and Parent will cause Purchaser to, provide a subsequent offering period of not less than three and no more than fifteen business days. In such an event, Purchaser must, and Parent will cause Purchaser to, immediately accept and promptly pay for all Shares tendered during the initial and the subsequent offering period in accordance with Rule 14d-11 under the Exchange Act. If the Purchaser elects to include a subsequent offering period, it will notify stockholders of the Company consistent with the requirements of the SEC.

THE PURCHASER DOES NOT CURRENTLY INTEND TO INCLUDE A SUBSEQUENT OFFERING PERIOD IN THE OFFER. UNDER RULE 14d-7(a)(2) UNDER THE EXCHANGE ACT, IN THE EVENT THAT THE PURCHASER SUBSEQUENTLY ELECTS TO INCLUDE A SUBSEQUENT OFFERING PERIOD, NO WITHDRAWAL RIGHTS WOULD APPLY TO SHARES TENDERED DURING SUCH SUBSEQUENT OFFERING PERIOD AND NO WITHDRAWAL RIGHTS WOULD APPLY DURING SUCH SUBSEQUENT OFFERING PERIOD WITH RESPECT TO SHARES TENDERED IN THE OFFER AND ACCEPTED FOR PAYMENT. THE SAME CONSIDERATION WILL BE PAID TO STOCKHOLDERS TENDERING SHARES IN THE OFFER OR IN A SUBSEQUENT OFFERING PERIOD, IF ONE IS INCLUDED.

Short-Form Merger.  Under Section 253 of the DGCL, if a corporation owns at least 90% of the outstanding shares of each class of a subsidiary corporation, the corporation holding such stock may merge such subsidiary into itself or itself into such subsidiary, without any action or vote on the part of the board of directors or stockholders of such other corporation (a “Short-Form Merger”). If the Purchaser acquires, pursuant to the Offer or otherwise, at least 90% of the outstanding Shares, the Purchaser will be able to effect the proposed Merger without a vote of the Company’s stockholders. In the event that the Purchaser acquires in the aggregate at least 90% of the outstanding Shares pursuant to the Offer or otherwise, then, at the election of the Purchaser, a Short-Form Merger could be effected without any further approval of the Company Board or the stockholders of the Company.

Recommendation.  The Company has represented to us in the Merger Agreement that the Board, acting upon the unanimous recommendation of the Special Committee, has (with Thomas D. Karol and Richard A. Novak obtaining) unanimously (a) determined that the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, are advisable and fair to, and in the best interests of, the stockholders of the Company, (b) approved the Merger Agreement and the transactions contemplated thereby, including the Offer and the Merger, (c) resolved to recommend acceptance of the Offer by the Company’s stockholders and (d) rendered inapplicable to the Offer (i) Section 203 of the DGCL and any similar anti-takeover laws and regulations, (ii) the Company’s “poison pill” and (iii) Article Thirteenth of the Company’s Restated Certificate of Incorporation.

The Company has agreed to file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 that will comply in all material respects with the provisions of all applicable federal securities laws. Additionally, the Company will use

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its commercially reasonable efforts to mail the Schedule 14D-9 to the stockholders of the Company along with the Offer Documents reasonably promptly after the commencement of the Offer.

Directors.  The Merger Agreement provides that, after Purchaser has purchased at least a majority of the Shares, Parent has the right to designate a number of directors of the Company that is equal to the product of the total number of directors on the Company board of directors multiplied by the percentage that the aggregate number of Shares beneficially owned by Parent or any affiliate of Parent bears to the number of Shares outstanding. In the event that Parent’s designees are appointed or elected to the board of directors, until the Effective Time the board of directors shall have at least three Independent Directors.

Top-Up Option.  Subject to certain terms and conditions set forth in the Merger Agreement, the Company has granted Parent and Purchaser a top-up option (the “Top-Up Option”) to purchase, at a price per share equal to the Offer Price, a number of Shares that, when added to the number of Shares owned by Parent or Purchaser or any wholly owned subsidiary of Parent or Purchaser at the time of exercise of the Top-Up Option, constitutes one Share more than 90% of the number of Shares that will be outstanding immediately after the issuance of the Top-Up Option Shares. The Top-Up Option is intended to expedite the timing of the completion of the Merger by permitting the Merger to occur pursuant to Delaware’s short form merger statute at a time when the approval of the Merger at a meeting of the Company’s stockholders would be assured because of Purchaser’s ownership of a majority of the Shares following completion of the Offer.

Effective Time; Structure; Effects.  The Effective Time will occur at the time that the Company files a certificate of Merger with the Secretary of State of the State of Delaware on the closing date of the Merger (or such later time as Purchaser and the Company may agree and as provided in the certificate of merger). The closing date will occur on the second business day after satisfaction or waiver of all of the Conditions to the Merger (other than those Conditions that are to be satisfied by actions taken at the closing) set forth in the Merger Agreement (or such other date as Purchaser and the Company may agree), as described below in “Conditions to the Merger.” If, as of or immediately following the Acceptance Date, the expiration of any subsequent offering period, or the exercise of the Top-Up Option, a short form merger is available, then the closing date will, subject to the satisfaction of the Conditions to the Merger, occur not later than the business day following the Acceptance Date, expiration of the subsequent offering period or closing of the purchase of the Top-Up Option Shares.

At the Effective Time, Purchaser will merge with and into the Company with the Company surviving the Merger as a wholly owned subsidiary of Parent (the “Surviving Corporation”). Following the earlier of the date of acceptance for payment pursuant to the Acceptance Date and the Effective Time, the Company’s common stock will be delisted from the NYSE, deregistered under the Exchange Act, and no longer publicly traded. The Company will be a privately held corporation and the Company’s Shares, other than the Shares of any employees of the Company who may be permitted to invest in the Surviving Corporation or a holding company or holding companies of the Surviving Corporation and who choose to so invest, will cease to have any ownership interest in the Company or rights as Company stockholders. Following the Merger, current stockholders of the Company will not participate in any future earnings or growth of the Company and will not benefit from any appreciation in value of the Company.

Treatment of Stock and Options.  As of January 12, 2007, there were approximately 975,308 shares of Company common stock subject to stock options granted under equity incentive plans to current executive officers and directors. Under the terms of the Merger Agreement except as otherwise agreed by Parent and the holder of such options, each outstanding stock option that remains outstanding immediately prior to the Effective Time, whether or not the option is vested or exercisable, will be canceled, and the holder of such stock option will receive a cash payment, without interest and less applicable withholding taxes, equal to the product of:

•  the number of shares of common stock subject to the option as of the Effective Time, multiplied by

•  the excess, if any, of equal to the highest price per share paid in the Offer over the exercise price per share of common stock subject to such option.

Treatment of Restricted Stock Shares and Performance Shares.  As of January 12, 2007, there were approximately 114,306 unvested restricted shares of Company common stock held by directors and executive officers under the equity incentive compensation plans. Under the terms of the Merger Agreement, except as otherwise agreed by Parent and the holder of the restricted common stock, immediately prior to the Effective Time, all such restricted common stock shall vest in full and be converted into the right to receive a cash payment equal to the highest price per share paid in the Offer per share of restricted common stock subject to a restricted stock unit, without interest and less any applicable withholding taxes.

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As of January 12, 2007, there were approximately 488,985 performance shares held by the Company’s executive officers under the Company’s equity incentive plan. Under the terms of the Merger Agreement, except as otherwise agreed by Parent and the holder of the performance shares, all such performance shares shall become immediately vested and be deemed to be earned at the same level set forth in the applicable Company stock plan and applicable award agreement, and the holder of the shares will receive a cash payment equal to the highest per share price paid in the Offer as of the Effective Date, or, with respect to Shares issuable with respect to performance shares which the holder has validly elected to defer on or prior to December 31, 2006, on such later date as the applicable holder shall have validly elected. See “BACKGROUND OF THE OFFER; CONTACTS WITH THE COMPANY” for a description of the deferral elections made by certain executive officers of the Company.

Representations and Warranties.  The Merger Agreement contains representations and warranties made by the Company to Purchaser and Parent, and representations and warranties made by Purchaser and Parent to the Company, and may be subject to important limitations and qualifications agreed to by the parties in connection with negotiating the terms of the Merger Agreement. In particular, the representations that the Company made are qualified by certain information that the Company filed with the SEC after June 30, 2006 and prior to the date of the Merger Agreement, as well as by a confidential disclosure letter that the Company delivered to Purchaser and Parent concurrently with the signing of the Merger Agreement. In addition, certain representations and warranties were made as of a specified date, may be subject to contractual standards of materiality different from those generally applicable to public disclosures to stockholders, or may have been used for the purpose of allocating risk among the parties rather than establishing matters of fact. For the foregoing reasons, you should not rely on the representations and warranties contained in the Merger Agreement as statements of factual information. The Company’s representations and warranties relate to, among other things:

•  the Company’s and its subsidiaries’ proper organization, good standing and qualification to do business;

•  the Company’s corporate power and authority to enter into the Merger Agreement and to consummate the transactions contemplated by the Merger Agreement;

•  the enforceability of the Merger Agreement as against the Company;

•  the Company’s capitalization, including in particular the number of shares of Company common stock, stock options and other equity-based interests;

•  the Company’s subsidiaries and its equity interests in them;

•  the required consents and approvals of governmental entities in connection with the transactions contemplated by the Merger Agreement;

•  the absence of violations of or conflicts with the Company’s and its subsidiaries’ governing documents, applicable law or certain agreements as a result of entering into the Merger Agreement and consummating the Merger;

•  the timeliness and compliance with requirements of the Company’s SEC filings since June 30, 2004, including the accuracy and compliance with requirements of the financial statements contained therein;

•  the adequacy of the Company’s disclosure controls and procedures;

•  the absence of undisclosed liabilities;

•  permits and compliance with applicable legal requirements;

•  environmental matters;

•  matters relating to employee benefit plans;

•  the absence of certain changes since June 30, 2006;

•  legal proceedings and governmental orders;

•  accuracy and compliance with applicable securities law of the information supplied by the Company for inclusion in filings made with the SEC in connection with the Merger, the Offer and the transactions contemplated by the Merger Agreement;

•  amendment of the Company’s Shareholder Rights Plan;

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•  tax matters;

•  employment and labor matters affecting the Company’s or its subsidiaries;

•  intellectual property;

•  real property;

•  the receipt by the Special Committee of an opinion from Citigroup and the receipt by the Board of a fairness opinion from UBS;

•  the possible required vote of the Company’s stockholders in connection with the possible required approval and adoption of the Merger Agreement and the transactions contemplated thereby, including the Merger;

•  the Company’s obligation to render Article Thirteenth of the Company’s Restated Certificate of Incorporation inapplicable to the Merger Agreement and the transactions contemplated thereby;

•  material contracts and performance of obligations thereunder;

•  absence of undisclosed brokers’ fees;

•  absence of interested-party transactions and undisclosed interests of the Company’s officers and directors;

•  insurance; and

•  customers and suppliers.

Many of the Company’s representations and warranties are qualified by a “Company Material Adverse Effect” standard. For the purposes of the Merger Agreement, “Company Material Adverse Effect” means any fact, circumstance, event, change, effect or occurrence that has or would be reasonably likely to have a material adverse effect on the business, results of operation or financial condition of the Company and its subsidiaries, taken as a whole.

However, any failure of the Company to meet internal or published projections, forecasts or revenue or earning predictions for any period will not, in and of itself, constitute a “Company Material Adverse Effect. In addition, a Company Material Adverse Effect will not have occurred as a result of any facts, circumstances, events, changes, effects or occurrences:

•  generally affecting the industries in which the Company and its subsidiaries operate, including general pricing changes;

•  generally affecting or the economy or the financial or securities markets in the United States or elsewhere in the world, including any regulatory and political conditions or developments, or any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism (except to the extent that, relative to other industry participants, there is a disproportionate impact on the assets, properties, business, results of operation or financial condition of the Company and its subsidiaries, taken as a whole);

•  resulting from the announcement of the proposal of the Offer, the Merger or the Merger Agreement and the transactions contemplated thereby,

•  resulting from any litigation brought by shareholders of the Company related to the Offer, the Merger Agreement or the transactions contemplated thereby.

The Merger Agreement also contains various representations and warranties made by Purchaser and Parent that are subject, in some cases, to specified exceptions and qualifications. The representations and warranties relate to, among other things:

•  organization, valid existence and good standing;

•  corporate or other power and authority to enter into the Merger Agreement and to consummate the Offer and Merger;

•  enforceability of the Merger Agreement as against Purchaser and Parent;

•  required consents and approvals of governmental entities in connection with the consummation of the Offer and the Merger;

•  the absence of any violation of or conflict with their governing documents, applicable law or certain agreements as a result of entering into the Merger Agreement and consummating the Offer and Merger;

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•  accuracy and compliance with applicable securities law of the information supplied by Purchaser and Parent for inclusion in the filings made with the SEC in connection with the Offer, the Merger and the other transactions contemplated by the Merger Agreement;

•  validity of debt and equity financing commitments and sufficiency of the commitments for the satisfaction of Parent and Purchaser’s obligations under the Agreement;

•  enforceability of a guarantee executed by the Sponsor in favor of the Company and delivered in connection with the signing of the Merger Agreement;

•  capitalization of Purchaser;

•  formation of Purchaser solely for the purpose of engaging in the transactions contemplated by the Merger Agreement and absence of prior activities.

•  absence of a requirement for a vote of Purchaser’s stockholders to consummate the transactions contemplated by the Merger Agreement;

•  absence of undisclosed brokers’ fees;

•  absence of any arrangements between Purchaser, Parent, or any of their affiliates, on the one hand, and any member of the Company’s management or board of directors, on the other hand, relating to the transactions contemplated by the Offer, the Merger Agreement or the Company’s operations after the Effective Time; and

•  Parent’s filings under the HSR Act.

The representations and warranties of each of the parties to the Merger Agreement will expire upon the Effective Time.

Conduct of Business Pending the Merger.  Under the Merger Agreement, the Company has agreed that, subject to certain exceptions, between the date of the Merger Agreement and prior to the date on which a majority of the Company’s directors are designees of Parent or Purchaser or the date, if any, on which the Merger Agreement is earlier terminated:

•  The Company and the Company’s subsidiaries will conduct operations only in the ordinary course of business consistent with past practice; and

•  The Company and the Company’s subsidiaries will use commercially reasonable efforts to maintain and preserve intact the Company’s business organization and advantageous business relationships, including the services of the Company’s key officers and key employees.

The Company has also agreed that during the same time period, except, in most cases, in the ordinary course of business consistent with past practice and subject to certain other exceptions, the Company will not, and will cause each of its subsidiaries not to (unless Parent gives its prior written consent):

•  make, declare, set aside or pay any dividend or distribution on any Shares (other than dividends by the Company’s subsidiaries to the Company or other subsidiaries, and regular quarterly dividends not exceeding $0.05 per share, consistent with past practice);

•  adjust, split, combine, or reclassify its capital stock or issue or authorize or propose to issue any other securities in respect of its capital stock, except for any such transaction by a wholly owned subsidiary that remains a wholly owned subsidiary after consummation of such transaction;

•  make material changes to its methods of tax accounting or its tax elections, or settle any material tax liability for an amount materially in excess of the amount reserved on the Company’s financial statements;

•  increase the compensation or other benefits provided to the Company’s directors or executive officers, enter into any employment, change in control, severance or retention agreement with any employee of the Company, or establish, adopt, enter into or amend any collective bargaining agreement or Company benefit plan;

•  make any loans to any of its officers, directors, employees, agents or consultants or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons, except as required by the terms of a Company benefit plan;

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•  materially change financial accounting policies or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by U.S. generally accepted accounting principles or applicable law;

•  amend or waive any provision of its certificate of incorporation or by-laws or similar applicable charter documents;

•  issue, sell, pledge, dispose of or encumber, or authorize the any of the foregoing in respect of Shares, other than certain permitted issuances of shares permitted under Company benefit plans;

•  among the Company and its wholly owned subsidiaries or among the Company’s wholly owned subsidiaries, purchase, redeem or otherwise acquire any Shares or any rights, warrants or options to acquire any such Shares;

•  incur, assume, guarantee, prepay or otherwise become liable for any indebtedness for borrowed money except for indebtedness incurred pursuant to agreements in effect prior to the execution of the Merger Agreement not to exceed $10 million;

•  sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber or otherwise dispose of any material portion of its material properties or assets;

•  modify, amend, terminate or waive any rights under certain material contracts in a manner which is adverse to the Company, or enter into any such contract other than in the ordinary course of business and other than in response to an unexpected disruption in supply;

•  make capital expenditures having an aggregate value in excess of (i) with respect to the Company’s fiscal year ending June 30, 2007, together with the amount of capital expenditures made by the Company through the date of the Merger Agreement, $42 million and (ii) with respect to the Company’s fiscal quarter ending September 30, 2007, $10 million;

•  make any investment or acquisition in excess of $500,000 in the aggregate;

•  settle any claim, action or proceeding, except those involving only the payment of monetary damages not in excess of $500,000 in the aggregate, or otherwise satisfy any liabilities in excess of such amount;

•  adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, re-capitalization or other reorganization;

•  take any material action with respect to any affiliate of the Company (other than any wholly owned subsidiary of the Company) that is outside the ordinary course of business consistent with past practice;

•  agree to take, permit any of its subsidiaries to take, or adopt any resolutions of its board of directors in support of, any of the foregoing actions.

In addition, Purchaser has agreed that between the date of the Merger Agreement and the Effective Time it shall not, and shall not permit any of its subsidiaries or affiliates to, take or agree to take any action that would reasonably be expected to prevent or materially delay the consummation of the Offer, the closing of the Merger or prevent or materially delay or materially impair the ability of Purchaser or Parent to satisfy the Tender Offer Conditions or the conditions precedent to the Merger, to obtain financing for the Offer and the Merger or to consummate the Offer, the Merger and the other transactions contemplated by the Merger Agreement.

Stockholders Meeting.  If the Company is required to submit the Merger Agreement to a vote of the stockholders of the Company, the Company must, as promptly as reasonably practicable following the mailing of the proxy statement, call and hold a meeting of the Company’s stockholders for the purpose of obtaining the vote of the Company’s stockholders. The Company is required to use all reasonable best efforts to solicit stockholder proxies in favor of the approval of the Merger Agreement. Unless the Merger Agreement has been terminated prior to the possible required meeting of stockholders, the Company is required to submit the Merger Agreement to a vote of stockholders even if the Company’s board (whether or not acting through the Special Committee, if then in existence) has approved, endorsed or recommended another takeover proposal or withdraws, modifies or amends its recommendation, described below in “No Solicitation of Transactions,” that the Company’s stockholders vote in favor of adoption of the Merger Agreement. Nevertheless, if a Short-Form Merger may be effected pursuant to Section 253 of the DGCL, Parent, Purchaser and the Company will take all necessary and appropriate action to cause the Merger to become effective without a meeting of the stockholders of the Company.

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No Solicitation of Transactions.  The Company has agreed not to, and to direct its representatives not to:

•  solicit, initiate, knowingly encourage (including by providing information) or facilitate any inquiries, proposals or offers with respect to, or the making or completion of, any Alternative Proposal (as defined below);

•  engage or participate in any negotiations regarding, or provide or cause to be provided any non-public information or data relating to the Company or any of its subsidiaries in connection with, or have any discussions with any person relating to, an actual or proposed Alternative Proposal, or otherwise knowingly engage or facilitate any effort or attempt to make or implement an Alternative Proposal;

•  approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any Alternative Proposal;

•  approve, endorse or recommend, or publicly announce an intention to approve, endorse or recommend, or enter into, any letter of intent, agreement in principle, merger agreement, acquisition agreement, option agreement or other similar agreement relating to any Alternative Proposal;

•  amend, terminate, waive or fail to enforce, or grant any consent under, any confidentiality, standstill or similar agreement. However, the Company is permitted to waive any such agreement to permit the counterparty to make a non-public offer or proposal to the board of directors (or the Special Committee) with respect to an Alternative Proposal (except that references in the definition of Alternative Proposal to “20%” are deemed to be references to “50%”).

In addition, the Company has agreed to, and to cause each of its subsidiaries to, and to direct each of its and its subsidiaries’ representatives to, immediately cease any existing solicitations, discussions or negotiations with any person (other than the parties hereto) that has made or indicated an intention to make an Alternative Proposal.

“Alternative Proposal” means:

•  any inquiry, proposal or offer from any person or group of persons other than Purchaser or one of its subsidiaries for a merger, reorganization, share exchange, consolidation, business combination, recapitalization, dissolution, liquidation, or similar transaction involving the Company (or any subsidiary or subsidiaries of the Company whose business constitutes 20% or more of the net revenues, net income or assets of the Company and its subsidiaries, taken as a whole);

•  any proposal for the issuance by the Company of over 20% of its equity securities; or

•  any proposal or offer to acquire in any manner, directly or indirectly, over 20% of the equity securities or consolidated total assets of the Company and its subsidiaries, in each case other than the Offer or the Merger.

We have agreed, however, that the Company may, in response to an unsolicited Alternative Proposal which did not result from or arise in connection with a breach of the Company’s non-solicitation obligations under the Merger Agreement and which the board (acting through the Special Committee) determines, in good faith, after consultation with its outside counsel and financial advisors, may reasonably be expected to lead to a Superior Proposal (as defined below):

•  furnish non-public information with respect to the Company and its subsidiaries to the person making such Alternative Proposal and its representatives pursuant to a customary confidentiality agreement no less restrictive of and no more favorable to the other party than the confidentiality agreement between the Company and the Sponsor;

•  participate in discussions or negotiations with such person and its representatives regarding such Alternative Proposal; provided that (i) Purchaser will be entitled to promptly receive an executed copy of such confidentiality agreement and (ii) the Company will promptly provide or make available to Purchaser any material non-public information concerning the Company or any of its subsidiaries that is provided to the person making such Alternative Proposal or its representatives, which was not previously provided or made available to Purchaser.

The Company has also agreed that neither the board of directors nor any committee thereof will withdraw or modify the recommendation that the stockholders of the Company tender their Shares in the Offer or otherwise approve the adoption of the Merger Agreement (the “Recommendation”) in a manner adverse to Purchaser or Parent, or publicly propose to do so, or approve or recommend or publicly propose to approve or recommend, any Alternative Proposal.

However, if, prior to receipt of stockholder approval of the Merger Agreement and the Merger, the board of directors or the Special Committee determines in good faith, after consultation with outside counsel, that failure to so withdraw, qualify or modify its Recommendation would be inconsistent with the board of directors’ or the Special Committee’s exercise of its

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fiduciary duties, the board of directors or any committee thereof may withdraw, qualify or modify its Recommendation (a “Change of Recommendation”). If such Change of Recommendation is the result of a Superior Proposal (as defined below), the Company is required to have first provided prior written notice to Purchaser that it is prepared to effect a Change of Recommendation in response to a Superior Proposal which notice must describe in reasonable detail and include any draft agreements pertaining to such Superior Proposal, and such Change of Recommendation can only be made if Purchaser has not made, within three business days of receipt of such notice, a proposal that the board of directors or any committee thereof determines is at least as favorable to the stockholders of the Company as such Superior Proposal.

“Superior Proposal” means any Alternative Proposal:

•  on terms which the board of directors (or the Special Committee) determines in good faith, after consultation with the Company’s outside legal counsel and financial advisors, to be more favorable to the holders of Shares than the Offer and the Merger, taking into account all the terms and conditions of such proposal and the Merger Agreement; and

•  that the board of directors (or the Special Committee) believes is reasonably capable of being completed, taking into account all financial, regulatory, legal and other aspects of such proposal. For purposes of the definition of “Superior Proposal”, the references to “20%” in the definition of Alternative Proposal are deemed to be references to “50%”.

The Company is required to promptly (and in any event within 48 hours) advise Purchaser and Parent of:

•  any Alternative Proposal or indication or inquiry with respect to or that would reasonably be expected to lead to any Alternative Proposal;

•  any request for non-public information relating to the Company or its subsidiaries, other than requests for information not reasonably expected to be related to an Alternative Proposal; and

•  any inquiry or request for discussion or negotiation regarding an Alternative Proposal, including in each case the identity of the person making any such Alternative Proposal or indication or inquiry and the material terms of any such Alternative Proposal or indication or inquiry (including copies of any document or correspondence evidencing such Alternative Proposal or inquiry).

The Company is required to keep Purchaser and Parent reasonably informed on a reasonably current basis of any material change to the terms of any such Alternative Proposal or indication or inquiry.

The Merger Agreement does not prohibit us or the Company’s board of directors (or the Special Committee) from making certain disclosures contemplated by securities laws.

Employee Benefits.  The parties have agreed that, for a period of one year after the Effective Time, the Surviving Corporation will provide the Company’s current and former employees (other than those covered by collective bargaining agreements) with compensation opportunities and benefits that are no less favorable in the aggregate than those that the Company provides as of the Effective Time (excluding the value to equity based awards).

For all purposes under the employee benefit plans of the Surviving Corporation providing benefits to employees of the Company after the Effective Time, each employee will be credited with his or her years of service with the Company under the employee benefit plans of the Surviving Corporation to the extent that he or she was entitled to credit for service under the Company’s corresponding benefit plans prior to the Effective Time. Each employee will be immediately eligible to participate in the Surviving Corporation’s new employee benefit plans that replace a similar or comparable old benefit plan under which the employee would have been eligible. In addition, for new plans of the Surviving Corporation, pre-existing condition exclusions and similar requirements will be waived to the extent they were waived under the Company’s old plans, and eligible expenses incurred by an employee during the portion of the year prior to consummation of the Merger will be credited for deductible, coinsurance and maximum out-of-pocket expenses for that year under the Surviving Corporation’s benefit plans.

Indemnification and Insurance.  Purchaser and Parent have agreed that all rights to exculpation, indemnification and advancement of expenses now existing in favor of the current or former directors, officers or employees of the Company or its subsidiaries as provided in their respective certificates of incorporation or by-laws or other organization documents or in any agreement will survive the Merger and continue in full force and effect. For a period of six (6) years from the earlier of the Acceptance Date and the Effective Time, Parent and the Surviving Corporation will maintain in effect the exculpation, indemnification and advancement of expenses provisions of the Company’s and any of its subsidiaries’ certificates of incorporation and by-laws or similar organization documents as in effect immediately prior to the earlier of the Acceptance

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Date and the Effective Time or in any indemnification agreements of the Company or its subsidiaries with any of their respective directors, officers or employees as in effect immediately prior to the earlier of the Acceptance Date and the Effective Time, and will not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any individuals who at the earlier of the Acceptance Date and the Effective Time were current or former directors, officers or employees of the Company or any of its subsidiaries. From and after the earlier of the Acceptance Date and the Effective Time Parent has agreed to cause the Surviving Corporation and its subsidiaries to honor, the foregoing obligations without limit as to time.

The parties have also agreed that from and after the earlier of the Acceptance Date and the Effective Time each of Parent and the Surviving Corporation will, to the fullest extent permitted under applicable law, indemnify and hold harmless (and advance funds in respect of each of the foregoing) each current and former director, officer or employee of the Company or any of its subsidiaries (each, an “Indemnified Party”) against any costs or expenses, judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any actual or threatened action, arising out of, relating to or in connection with any action or omission occurring or alleged to have occurred whether before or after the earlier of the Acceptance Date and the Effective Time (including acts or omissions in connection with such persons serving as an officer, director or other fiduciary in any entity if such service was at the request or for the benefit of the Company). However, neither Parent nor the Surviving Corporation will be liable for any settlement effected without either Parent’s or the Surviving Corporation’s prior written consent (which consent shall not be unreasonably withheld or delayed) and Parent and the Surviving Corporation will not be obligated to pay the fees and expenses of more than one counsel for all Indemnified Parties in any jurisdiction with respect to any single such claim, action, suit, proceeding or investigation, unless the use of one counsel for such Indemnified Parties would present such counsel with a conflict of interest that would make such joint representation inappropriate.

The parties have further agreed that for a period of six (6) years from the earlier of the Acceptance Date and the Effective Time, Parent will either cause to be maintained in effect the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by the Company and its subsidiaries or provide substitute policies or purchase or cause the Surviving Corporation to purchase, a “tail policy,” in either case of at least the same coverage and amounts and containing terms and conditions that are not less advantageous in the aggregate than such policy with respect to matters arising on or before the earlier of the Acceptance Date and the Effective Time. However, after the earlier of the Acceptance Date and the Effective Time, Parent will not be required to pay with respect to such insurance policies in respect of any one policy year annual premiums in excess of 300% of the last annual premium paid by the Company prior to the date of the Merger Agreement in respect of such coverage, but in such case will purchase as much coverage as reasonably practicable for such amount. Further, if the Surviving Corporation purchases a “tail policy” and the same coverage costs more than 500% of such last annual premium, the Surviving Corporation will purchase the maximum amount of coverage that can be obtained for 500% of such last annual premium. At the Company’s option, the Company may purchase prior to the earlier of the Acceptance Date and the Effective Time, a six-year prepaid “tail” policy on terms and conditions providing substantially equivalent benefits as the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by the Company and its subsidiaries with respect to matters arising on or before the earlier of the Acceptance Date and the Effective Time, covering without limitation the transactions contemplated hereby so long as the cost of such tail policy does not exceed 500% of the last annual premium paid in respect of the current coverage. If the Company obtains such a tail prepaid policy, Parent will cause such policy to be maintained in full force and effect, for its full term, and cause all obligations thereunder to be honored by the Surviving Corporation.

Parent has also agreed to pay all reasonable expenses, including reasonable attorneys’ fees that may be incurred by any Indemnified Party in enforcing the foregoing obligations.

If Purchaser, the Surviving Corporation or any of their respective successors or assigns (i) consolidates with or merges into any other person and is not be the continuing or Surviving Corporation or entity in such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any person, then, and in either such case, proper provision will be made so that the successors and assigns of Parent or the Surviving Corporation, as the case may be, assume the foregoing obligations.

Agreement to Take Further Action and to Use All Reasonable Best Efforts.  Each of the parties to the Merger Agreement has agreed to use all reasonable best efforts to do anything necessary, proper or advisable under applicable laws to consummate the Offer and to consummate and make effective the Merger. The Company has also agreed to use its reasonable best efforts to obtain necessary consents or waivers from third parties (although the Company is not required to pay any consideration or incur

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any liability in connection with obtaining such consents or waivers, other than de minimis amounts or if Purchaser and Parent have provided assurance of repayment), to defend any lawsuit challenging the Merger or the Merger Agreement, and to execute and deliver any additional documents necessary to complete the Merger.

The parties have agreed to use reasonable best efforts to cooperate and consult with each other in making any filings and notifications to any governmental entity, and have agreed to supply any governmental entity with requested information as promptly as practicable and to take, or cause to be taken all other actions proper or advisable to consummate and make effective the Merger and related transactions.

On January 3, 2007, the Purchaser was notified by the FTC that, as of that date, it had granted early termination of the Hart-Scott-Rodino Act waiting period.

Financing Commitments; Company Cooperation.  Parent has agreed to use its reasonable best efforts to arrange the debt financing in connection with the Offer and the Merger on the terms described in the debt commitment letter delivered in connection with the signing of the Merger Agreement. If any of this debt financing becomes unavailable on the terms described in the debt commitment letter, Parent has agreed to use its reasonable best efforts to obtain alternative debt financing on terms no less favorable to Parent or Purchaser and no more adverse to the ability of Parent and Purchaser to consummate the transactions contemplated by the Merger Agreement.

The Company has agreed to use reasonable efforts to cooperate with Purchaser and Parent in obtaining the financing, including:

•  providing to the parties providing the financing all customary financial statements for financing similar to those described in the debt financing commitments received by the Purchaser and using reasonable best efforts to provide additional financial information as Parent shall reasonably request;

•  participating in a reasonable number of meetings, drafting sessions and due diligence sessions in connection with the financing;

•  subject to certain limitations, assisting in the preparation of offering documents or confidential information memoranda and materials for rating agency presentations;

•  reasonably cooperating with the marketing efforts for any of the debt financing; and

•  executing and delivering (or using reasonable best efforts to obtain from advisors), customary certificates with respect to solvency matters, accounting comfort letters, legal opinions, surveys, title insurance or other documents and instruments ancillary to the financing as may be reasonably requested by Parent.

The foregoing notwithstanding, the Company’s pre-closing directors are not required to take any action with respect to the foregoing and neither the Company nor any of its subsidiaries is obligated to take any action that requires action or approval by the pre-closing directors. None of the Company or any of its subsidiaries or their representatives is required to incur any expense in connection with the debt financing that is not simultaneously reimbursed by Parent. Parent has also agreed to indemnify the Company for losses suffered by the Company in connection with the arrangement of the debt financing and any information utilized in connection therewith (other than information provided by the Company or its subsidiaries). Parent’s obligation to pay such amounts are limited by the Sponsor Guarantee, discussed in greater detail under Section 11 — “The Sponsor Guarantee”. Neither the Company nor any of its affiliates or representatives is required to incur any expenses in excess $250,000 in connection with the required financing cooperation, except to the extent the cap of the Sponsor Guarantee, is increased in respect of such additional amounts.

Private Placement Notes Repayment.  At the written request of Parent, the Company has agreed to take all actions reasonably requested by Parent that are necessary to assist Parent to repay all of the Company’s outstanding private placement notes outstanding on the closing date. The actions the Company has agreed to take include the delivery of notices and other documents in accordance with the applicable provisions of each note purchase agreement to which the Company is a party. However, the Company is not required to provide any irrevocable notice or take any other irrevocable act regarding Parent’s note repurchases unless the action is taken simultaneously with the Merger being consummated and, prior to the Company’s being required to take the action, Parent has deposited sufficient funds to effect the note repayment.

In connection with the foregoing, the Company has agreed to provide Parent with a reasonable period of time to review and comment on all notices, certificates and other documents to be delivered to holders of any of the private placement notes. Parent,

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upon request by the Company, has agreed to promptly reimburse the Company for all reasonable out-of-pocket costs incurred in connection with the repayment of the notes, and to indemnify the Company and its representatives for all losses suffered or incurred by them arising in connection with the repayment. Parent’s obligation to pay such amounts are limited by the Sponsor Guarantee. Neither the Company nor any of its affiliates or representatives is required to incur any expenses in excess $250,000 in connection with the note repurchases, except to the extent the cap of the Sponsor Guarantee is increased in respect of such additional amounts.

Other Covenants and Agreements.  The Merger Agreement contains additional agreements among the Company, Purchaser and Parent relating to, among other things:

•  providing Parent access to the Company’s properties, contracts, commitments, books and records;

•  notices of certain events, and cooperation to mitigate any adverse consequences of those events;

•  the filing of documents with the SEC;

•  the issuance of a joint press release announcing the execution of the Merger Agreement;

•  actions necessary to exempt the transactions contemplated by the Merger Agreement from the effect of any takeover statutes;

•  the validity of the Sponsor Guarantee and that it constitutes a legally binding obligation enforceable in accordance with its terms;

•  the opportunity of Parent to participate in the defense or settlement of stockholder litigation against the Company or its directors of officers relating to the transactions contemplated by the Offer and the Merger Agreement.

Conditions to the Merger.  The obligations of the parties to complete the Merger are subject to the satisfaction or waiver of the following mutual conditions:

•  unless the Merger is consummated pursuant to a Short-Form Merger, the Company Stockholder Approval must be obtained;

•  no governmental entity shall have enacted, issued or entered any restraining order, injunction or similar order or legal restraint or prohibition which prohibits consummation of the Merger; and

•  Purchaser shall have accepted for purchase the Shares tendered pursuant to the Offer.

Conditions to the Offer.  Parent is not required to accept for payment or pay for the Shares if, as of the Expiration Date:

•  A number of Shares which represents more than one-half of the number of Shares outstanding on a fully diluted basis has not been validly tendered and not withdrawn prior to the expiration of the Offer (the “Minimum Condition”).

•  A governmental entity shall have enacted, issued or entered any restraining order, injunction or similar order or legal restraint or prohibition which remains in effect that enjoins or otherwise prohibits consummation of the Offer or the Merger.

•  the Merger Agreement has been terminated in accordance with its terms;

•  any of the representations and warranties of the Company is not true and correct in all respects as of the date upon which such representations and warranties must be true and correct except (subject to certain exceptions as specified in the Merger Agreement) where the failure of such representations and warranties to be so true and correct would not have, individually or in the aggregate, a Company Material Adverse Effect;

•  the Company has not in all material respects performed all obligations and complied with all covenants required by the Merger Agreement prior to the Expiration Date, and such failure to perform shall not have been cured prior to the Expiration Date; and

•  there occurs and is continuing any Company Material Adverse Effect.

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Termination.  The Merger Agreement may be terminated by either Parent or the Company, and the Offer or the Merger may be abandoned at any time prior to the Effective Time, if:

1. Parent and the Company agree;

2. prior to the purchase of Shares pursuant to the Offer, the Effective Time shall not have occurred by June 30, 2007, except that this right will not be available to a party if the failure to fulfill any of such party’s obligations under the Merger Agreement is the proximate cause of the failure to complete the Merger on or prior to such date;

3. any final and nonappealable injunction or order restrains, enjoins or prohibits the consummation of the Offer or the Merger, except that the party seeking to terminate the Merger Agreement must have sought to prevent, oppose and remove such injunction; or

4. at any time after March 16, 2007, if, as of the then most recent Expiration Date occurring on or after March 16, 2007, all of the Tender Offer Conditions (other than the Minimum Condition) were satisfied for at least two consecutive business days prior to such Expiration Date.

The Merger Agreement may be terminated by Parent, and the Offer or the Merger may be abandoned at any time prior to the Effective Time:

5. if upon 30 days prior written notice to the Company, the Company breaches or fails to perform any of its representations, warranties, covenants or other agreements contained in the Merger Agreement, which breach or failure to perform:

•  would result in a failure of (i) the fourth or fifth condition to the Offer (above) to be satisfied, (ii) a condition to the Merger (above) to be satisfied or (iii) the Offer to be consummated; and

•  cannot be cured by June 30, 2007;

6. prior to the purchase of Shares in the Offer, if the board of directors or the Special Committee:

•  withdraws, modifies or qualifies (or publicly proposes to withdraw, modify or qualify) in any manner adverse to Parent or Purchaser, its recommendation that the Company’s stockholders tender pursuant to the Offer; or

•  approves, endorses or recommends (or publicly proposes to approve, endorse or recommend) any Alternative Proposal;

7. if, since the date of the Merger Agreement and prior to the purchase of Shares in the Offer, a Company Material Adverse Effect has occurred that cannot be cured by June 30, 2007.

The Merger Agreement may be terminated by the Company, and the Offer or the Merger may be abandoned at any time prior to the Effective Time:

8. upon 30 days prior written notice to Parent, if Parent or Purchaser breached or failed to perform any of its representations, warranties, covenants or other agreements contained in the Merger Agreement, which breach or failure to perform:

•  would result in a Parent Material Adverse Effect or would result in a failure of any condition to the Offer (above) or condition to the Merger (above) to be satisfied or the failure of the Acceptance Date or the closing to occur; and

•  cannot be cured by June 30, 2007;

9. in order to enter in to a transaction that is a Superior Proposal, if prior to the Acceptance Date, (i) the board of directors or the Special Committee has received a Superior Proposal, (ii) the Company has notified Parent of its intention to terminate the Merger Agreement, (iii) at least five business days following receipt of such notice the board of directors or the Special Committee has determined that any revised proposal made by Parent is not at least as favorable to the stockholders of the Company as the Superior Proposal and (iv) prior to or concurrently with such termination, the Company pays to Purchaser the termination fee (described below); or

10. if (i) the Merger is not consummated within 5 business days of the first date on which all Conditions to the Merger are satisfied and at the time of termination such conditions continue to be satisfied (however, the Company may not

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terminate the Merger Agreement under this provision (i) until 25 business days have passed since the Merger Agreement was executed), (ii) Purchaser has terminated the Offer or failed to extend it as required under the Merger Agreement or (iii) in violation of the Merger Agreement, Purchaser has failed to accept for payment and pay for Shares validly tendered and not withdrawn in the Offer.

Termination Fees and Expenses.  Termination Fee Payable by the Company. The Company must pay to an affiliate of Sponsor a termination fee of $29 million (less any previously paid expenses of Parent or Purchaser as described below), if:

•  (i) after the date of the Merger Agreement an Alternative Proposal, substituting 40% for the 20% threshold in the definition of Alternative Proposal (such altered proposal, a “Qualifying Transaction”) is or continues to be publicly proposed or publicly disclosed; (ii) the Merger Agreement is terminated by Parent upon a breach by the Company causing the failure to satisfy a condition to the Purchaser’s obligation to complete (A) the Merger or (B) Offer (as discussed above), which breach or failure can not be cured by June 30, 2007 (and a proposal regarding a Qualifying Transaction remains outstanding at the time of the event giving rise to the termination); or the Merger Agreement is terminated by either Parent or the Company if, as of the then most recent Expiration Date occurring on or after March 16, 2007, all of the Tender Offer Conditions (other than the Minimum Condition) were satisfied for at least two consecutive business days prior to such Expiration Date (and a proposal regarding a Qualifying Transaction remains outstanding as of the most recent Expiration Date) and (iii) the Company enters into a definitive agreement with respect to, or consummates, a transaction contemplated by any proposal regarding a Qualifying Transaction within 12 months after the date the Merger Agreement is terminated;

•  the Merger Agreement is terminated by the Company in order to enter into a transaction that is a Superior Proposal; or

•  the Merger Agreement is terminated by Parent because the Company’s board of directors (or the Special Committee) either (i) withdraws, modifies or qualifies (or publicly proposes to withdraw, modify or qualify) in any manner adverse to Purchaser or Parent, its recommendation that the Company’s stockholders tender their Shares pursuant to the Offer or (ii) approves, endorses or recommends (or publicly proposes to approve, endorse or recommend) any Alternative Proposal.

We refer to the $29 million amount above as the “Termination Fee.”

Termination Fee Payable by Purchaser.  Parent has agreed to pay the Company a termination fee of $35 million if:

•  the Company terminates the Merger Agreement pursuant to its right to terminate under paragraph 8 above and at the time of such termination there is no state of facts (excluding the breach by Purchaser or Parent or the public announcement by the Company of such breach) that would reasonably be expected to cause the Conditions to the Merger (other than the condition regarding a governmental entity enacting a restraining order or legal restraint prohibiting the consummation of the Merger) or the Conditions to the Offer (other than the termination of the Merger Agreement by Purchaser or Parent) not to be satisfied on or before June 30, 2007, assuming the Expiration Date and the Closing were to be scheduled on June 30, 2007;

•  the Company terminates the Merger Agreement pursuant to its right to terminate under paragraph 10 above; or

•  Parent or the Company terminate the Merger Agreement pursuant to their common right to do so under paragraph 2 above, and at the time of such termination, the Conditions to the Offer (above) have been satisfied (other than where a breach by Parent or Purchaser has caused the failure of such condition).

Reimbursement of Purchaser’s Fees and Expenses.  The Company must reimburse Parent for all of its and Purchaser’s reasonable out-of-pocket documented expenses incurred on their behalf in connection with or related to the Merger Agreement and all other matters related to the Merger, including their financing, subject to a maximum of $10 million, in the aggregate, in the event that:

•  a proposal regarding a Qualifying Transaction has been made known to the public or has been made directly to the Company’s stockholders generally or any person has publicly announced an intention to make a proposal regarding a Qualifying Transaction that reasonably appears to be bona fide;

•  the Merger Agreement is subsequently terminated pursuant to paragraph 4 above; and

•  at the time of such termination, the Termination Fee is not then payable.

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Amendment and Waiver.  The Merger Agreement may be amended by a written agreement signed by the Company, Purchaser and Parent at any time prior to the Effective Time. No amendment that requires further approval of the Company’s stockholders will be made without obtaining that approval.

The Sponsor Guarantee.  Concurrent with the execution of the Merger Agreement, the Sponsor delivered to the Company an amended and restated guarantee addressed to the Company, guaranteeing certain obligations of Purchaser and Parent, respectively under the Merger Agreement (the “Sponsor Guarantee”). The Sponsor Guarantee constitutes a legal, valid and binding obligation of the Sponsor, pursuant to which the Sponsor absolutely, unconditionally and irrevocably guarantees to the Company, the due and punctual observance, payment, performance and discharge of the obligation of Parent and Purchaser to make any required payment pursuant to the Merger Agreement, namely the payment of a $35 million termination fee discussed in Section 11 — “Termination Fees and Expenses” (below) and the payment of $500,000 of fees and expenses borne by the Company arising from the enforcement by the Company of the Sponsor Guarantee, as against the Guarantor. The maximum amount payable by the Sponsor under the Sponsor Guarantee may not exceed $35.5 million. The Sponsor Guarantee is binding on the Sponsor, its successors and assigns until the obligations arising thereunder are satisfied in full.

12.   SOURCE AND AMOUNT OF FUNDS.

Parent expects that up to $901.0 million will be required to consummate the Offer and the Merger. Parent anticipates funding the purchase price and related expenses with (i) funds to be borrowed under a senior secured tender offer credit facility (the “Tender Facility”) committed to by Bank of America, N.A. (“BOA”), Merrill Lynch Capital Corporation (“MLCC”) and General Electric Capital Corporation (“GECC” and, together with BOA and MLCC, the “Banks”) expected to be drawn in the amount of approximately $439.5 million and (ii) investments by the Sponsor in the form of common stock, redeemable preferred stock or subordinated indebtedness in the amount of approximately $461.5 million. The Banks have also committed to provide Purchaser funds to be borrowed under senior secured credit facilities (the “Permanent Credit Facilities”) in the amount of $750.0 million in order to refinance the Tender Facility, redeem and repay some of the preferred stock and indebtedness invested in by the Sponsor, refinance certain of the Company’s existing indebtedness, pay fees and expenses in connection with the Offer and the Merger and to provide for capital expenditures, acquisitions, investments, ongoing working capital requirements and funding for general corporate purposes of the Surviving Corporation and its subsidiaries. In the event the Short-Form Merger described above under Section 11 — “Short-Form Merger” does not occur, a portion of these funds will be used to finance the payment of consideration to shareholders in connection with a merger under Section 251 of the DGCL (a “Long-Form Merger”).

The following summary of certain financing arrangements in connection with the Offer and the Merger is qualified in its entirety by reference to each of the equity commitment letter and debt commitment letter described below, copies of which are filed as an exhibit to the Schedule TO and are incorporated by reference herein. You are urged to read the commitment letters in their entirety for a more complete description of the provisions summarized below.

Sponsor Financing.  Parent has received an equity commitment letter from the Sponsor (the “Equity Commitment Letter”) pursuant to which the Sponsor has committed to invest up to $461.5 million in cash. The Sponsor may assign all or a portion of its obligations to make such investments to affiliates or affiliated funds or to entities governed by an affiliate or an affiliated fund, provided that any such assignment does not relieve the Sponsor of its obligations under the Equity Commitment Letter. The commitment of the Sponsor will be reduced by any amounts actually invested in or contributed to Parent by such affiliates on or before the closing date.

The Sponsor’s commitment is conditioned upon (i) the satisfaction of all conditions precedents to the obligations of Parent and Purchaser to consummate the Offer and the transactions set forth in the Merger Agreement and (ii) substantially contemporaneous funding of the Tender Facility to be issued pursuant to the debt commitment letter (described below) or any alternative debt financing. In addition, the Sponsor’s obligations will expire automatically upon the earlier to occur of (i) termination of the Merger Agreement pursuant to its terms and (ii) the assertion by the Company or any of its affiliates in any litigation or other proceeding of any claim against the Sponsor Guarantee.

Debt Financing.  Parent has received a debt commitment letter, dated as of January 15, 2007, from BOA, Banc of America Securities LLC (“BAS”), MLCC, Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S” and GECC (together, the “Debt Financing Sources”) pursuant to which, subject to the conditions set forth therein, the Banks have each severally and not jointly committed to provide the Tender Facility and the Permanent Credit Facilities for the uses described above.

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Tender Facility.  The Tender Facility will consist of a $465.0 million term loan maturing at the earlier of (a) the closing of a Long-Form Merger and (b) 180 days after the initial funding under the Tender Facility (the “Tender Closing Date”). The Tender Facility permits an affiliate of Parent and Purchaser (“Borrower”) to make additional drawings during the 30 day period after the Tender Closing Date in minimum amounts to be agreed. No alternative financing arrangements or alternative financing plans have been made in the event that the Tender Facility is not available as anticipated.

The commitment of the Banks with respect to the Tender Facility expires upon the earliest to occur of (A) the execution and delivery of definitive tender documentation by all parties thereto, (B) June 30, 2007, if the Tender Closing Date has not occurred on or prior to such date, (C) the date on which this Offer is abandoned, withdrawn or terminated and (D) the date which is 14 days after the End Date (as defined in the Merger Agreement).

The availability of the Tender Facility is subject to certain conditions, including the consummation of the Offer in accordance with the Merger Agreement without waiver or amendment of any material provisions thereof (other than any such waivers or amendments as are not, taken as a whole, materially adverse to Debt Financing Sources unless consented to by the Joint Lead Arrangers (as defined below)), compliance with the margin regulations and funding of an equity contribution by the Sponsor. The only representations relating to the Company the making of which shall be a condition to the availability of the Tender Facility shall be such of the representations made by the Company in the Merger Agreement as are material to the interests of the lenders, but only to the extent that Parent has the right to terminate its obligations under the Merger Agreement as a result of a breach of such representations, as well as representations of Borrower regarding Federal Reserve margin regulations, the Investment Company Act and Borrower’s corporate power and authority to enter into, and the enforceability of, the definitive documentation for the Tender Facility.

BAS and MLPF&S have been appointed as joint lead arrangers (the “Joint Lead Arrangers”) and joint bookrunners for the Tender Facility. BOA will be the administrative agent and collateral agent, MLCC will be syndication agent and GECC will be documentation agent for the Tender Facility.

Interest Rate and Fees.  Amounts outstanding under the Tender Facility will bear interest at a rate equal to, at our option (i) an alternate base rate plus an applicable margin or (ii) an adjusted LIBOR rate plus an applicable margin. We expect the applicable margins to be 2.00% with respect to ABR loans and 3.00% with respect to LIBOR loans.

A per annum commitment fee on the undrawn portion of the commitments in respect of the Tender Facility shall accrue from the Tender Closing Date at a rate per annum equal to 0.50% although such commitment fee shall be waived if the commitments for the undrawn portion of the Tender Facility are terminated on or prior to the 15th day following the Tender Closing Date.

Prepayments and Amortization.  Borrower will be permitted to make voluntary prepayments with respect to the Tender Facility at any time, without premium or penalty (other than LIBOR breakage costs, if applicable).

Guarantors.  All obligations under the Tender Facility will be unconditionally guaranteed by Purchaser and a direct subsidiary of Parent and the direct parent of the Borrower (“Holdings”).

Security.  The obligations of Borrower and the guarantors under the Tender Facility will be secured by substantially all of the tangible and intangible property and assets of Borrower, Purchaser and Holdings, including perfected first priority pledges in the shares tendered in the Offer and all capital stock of Borrower and Purchaser.

Other Terms.  The Tender Facility will contain representations and warranties and affirmative and negative covenants, in each case consistent with documentation for transactions of this type for companies owned by major private equity sponsors, including restrictions on the ability of Borrower, Holdings and Purchaser to engage in anything other than limited activities, own any assets or incur any liabilities. The Tender Facility will include customary events of default, including a change of control and will contain restrictions on the Company and its subsidiaries following the Tender Closing Date that are agreed between the Borrower and the Joint Lead Arrangers, but that will in no event be more restrictive than those contained in the Company’s credit agreement.

Permanent Credit Facilities.  The Permanent Credit Facilities will be composed of a $450.0 million senior secured first lien term loan facility with a term of seven years, a $100.0 million senior secured revolving credit facility with a term of six years and a $200.0 million senior secured second lien term loan facility with a term of seven years and six months. The revolving credit facility will include sublimits for the issuance of letters of credit and swingline loans. In addition, the definitive documentation for the Permanent Credit Facilities will permit Borrower to add one or more uncommitted incremental term loan

36

facilities and/or increase commitments under the revolving credit facility in an aggregate amount of up to $80.0 million, subject to certain conditions. No alternative financing arrangements or alternative financing plans have been made in the event that the Permanent Credit Facilities are not available as anticipated.

The commitment of the Banks with respect to the Permanent Credit Facilities expires upon the earliest to occur of (A) the termination of the Tender Facility under certain circumstances, (B) the execution and delivery of definitive documentation with respect to the Permanent Credit Facilities or (C) the date which is 14 days after the End Date (as defined in the Merger Agreement), but not later than October 15, 2007.

The availability of the Permanent Credit Facilities is subject to certain conditions, including (i) the refinancing of each of the Tender Facility, subordinated indebtedness incurred in connection with the Sponsor financing and certain existing indebtedness of the Company and (ii), unless the Short-Form Merger has occurred, consummation of a Long-Form Merger in accordance with the Merger Agreement without waiver or amendment of any material provisions thereof (other than any such waivers or amendments as are not, taken as a whole, materially adverse to Debt Financing Sources unless consented to by the Joint Lead Arrangers). The only representations relating to the Company the making of which shall be a condition to the availability of the Permanent Credit Facilities shall be such of the representations made by the Company in the Merger Agreement as are material to the interests of the lenders, but only to the extent that Parent has the right to terminate its obligations under the Merger Agreement as a result of a breach of such representations, as well as representations of Borrower regarding Federal Reserve margin regulations, the Investment Company Act and Borrower’s corporate power and authority to enter into, and the enforceability of, the definitive documentation for the Permanent Credit Facilities.

BAS and MLPF&S have been appointed as joint lead arrangers and joint bookrunners for the Permanent Credit Facilities. BOA will be the administrative agent and collateral agent, MLCC will be syndication agent and GECC will be documentation agent for the Permanent Credit Facilities.

Interest Rate and Fees.  Amounts outstanding under the Permanent Credit Facilities will bear interest at a rate equal to, at our option (i) an alternate base rate plus an applicable margin or (ii) an adjusted LIBOR rate plus an applicable margin. We expect the applicable margins to be:

•  for the first lien term loan facility, 1.25% with respect to ABR loans and 2.25% with respect to LIBOR loans,

•  for the revolving credit facility, 1.25% with respect to ABR loans and 2.25% with respect to LIBOR loans, and

•  for the second lien term loan facility, 5.25% with respect to ABR loans and 6.25% with respect to LIBOR loans.

The applicable margins for loans under the revolving credit facility may be reduced based on a grid to be agreed.

We will pay certain fees with respect to the Permanent Credit Facilities, including: (i) a commitment fee of 0.50% per annum (subject to a step-down based on leverage) on the daily unused amount of the revolving credit facility, (ii) fronting fees at a rate of 0.125% per annum on letters of credit issued under the Permanent Credit Facilities and (iii) customary annual administration fees.

Prepayments and Amortization.  Borrower will be permitted to make voluntary prepayments with respect to the first lien term loan facility and the revolving credit facility at any time, without premium or penalty (other than LIBOR breakage costs, if applicable). Borrower will be permitted to make voluntary prepayments with respect to the second lien term loan facility at 102.0% of the principal amount prepaid if such prepayment occurs on or prior to the first anniversary of the closing date, at 101.0% of the principal amount prepaid if such prepayment occurs after the first anniversary of the closing date but prior to the second anniversary of the closing date and thereafter at any time without premium or penalty (other than LIBOR breakage costs, if applicable). Borrower will be required to make mandatory prepayments of term loans with:

•  100% of the net cash proceeds of specified sales and other dispositions other than in the ordinary course (subject to reinvestment rights and other exceptions to be agreed),

•  100% of the net cash proceeds of the issuances of debt (other than permitted debt), and

•  50% of the Surviving Corporation’s annual excess cash flow (to be defined), with such percentage subject to reduction based on leverage of the Surviving Corporation.

The first lien term loans will also have required interim amortization payments equal to 1% of the original principal amount thereof per annum, payable quarterly, with the balance payable at the final maturity date of such term loans. The second lien

37

term loans will not be subject to interim amortization. Upon a change of control (to be defined), Borrower will be required to offer to purchase all outstanding second lien term loans at a price equal to 101.0% of the principal amount thereof if such purchase occurs on or prior to the second anniversary of the closing date and at 100.0% if such purchase occurs thereafter (in each case, subject to LIBOR breakage costs, if applicable).

Guarantors.  All obligations under the Permanent Credit Facilities will be unconditionally guaranteed by each existing and future wholly-owned material domestic subsidiary of the Surviving Corporation, subject to exceptions to be agreed.

Security.  The obligations of Borrower and the guarantors under the first lien term loan facility and revolving credit facility will be secured by perfected first priority pledges, and the obligations of Borrower and the guarantors under the second lien term loan facility will be secured by perfected second priority pledges, of all of the equity interests of Borrower and each of Borrower’s direct and indirect material domestic subsidiaries and of 65% of the equity interests of Borrower’s direct and indirect “first-tier” material foreign subsidiaries, and perfected first priority security interests with respect to the first lien term loan facility and revolving credit facility and perfected second priority security interests with respect to the second lien term loan facility in and mortgages on all owned material tangible and intangible assets (including, without limitation, accounts receivable, inventory, equipment (excluding vehicles), general intangibles, intercompany promissory notes, insurance policies, investment property, U.S. intellectual property and material owned real property, proceeds of the foregoing (but excluding cash and deposit accounts and leasehold interests and other exceptions to be agreed) of Borrower and the guarantors, wherever located, now or hereafter owned. A security interest or pledge will not be required to be provided to the extent, in the case of any foreign subsidiary, such pledge or security interest would be prohibited by applicable law or would result in materially adverse tax consequences, to the extent the cost of obtaining a pledge or security interest is excessive in relation to the benefit thereof and in certain other cases to be agreed consistent with transactions for companies owned by Sponsor. If the security is not provided at closing despite the use of commercially reasonable efforts to do so, the delivery of the security will not be a condition precedent to the availability of the Permanent Credit Facilities on the closing date, but instead will be required to be delivered following the closing date pursuant to arrangements to be mutually agreed upon.

Unrestricted Subsidiaries.  Under the Permanent Credit Facilities, certain subsidiaries of Borrower may be treated as “unrestricted” on terms consistent with documentation for recent transactions for companies owned by the Sponsor.

Other Terms.  The Permanent Credit Facilities will contain representations and warranties and affirmative and negative covenants, in each case consistent with documentation for recent transactions for companies owned by the Sponsor, including restrictions on asset sales and changes of business and ownership, mergers and acquisitions, dividends and stock repurchases and redemptions, indebtedness, investments, liens and further negative pledges, transactions with affiliates, hedging agreements, amendments or prepayments of subordinated indebtedness or indebtedness under the second lien term loan facility, modifications and waivers of material documents and changes to the fiscal year. The Permanent Credit Facilities will require compliance with a maximum senior secured leverage ratio and the first lien term loan facility and revolving credit facility will also require compliance with a minimum consolidated net cash interest coverage ratio. The Permanent Credit Facilities will include customary events of default, including, with respect to the first lien term loan facility and revolving credit facility, a change of control.

THE OFFER IS NOT CONDITIONED ON THE PURCHASER OBTAINING FINANCING.

13.   DIVIDENDS AND DISTRIBUTIONS.

The Merger Agreement provides that, between the date of the Merger Agreement and the date on which a majority of the Company’s directors are designees of Parent or Purchaser, without the prior written consent of Parent, the Company may not make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire or encumber, any shares of its capital stock or any securities or obligations convertible into or exchangeable for any shares of its capital stock, except in connection with cashless exercises or similar transactions pursuant to the exercise of stock options or other awards issued and outstanding as of the date of the Merger Agreement under any company stock plans or permitted under the Merger Agreement to be granted after the date of the Merger Agreement; provided that the Company may continue to pay regular quarterly cash dividends on the Shares consistent with past practice (not to exceed $0.05 per share per quarter).

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14.   CERTAIN CONDITIONS TO THE OFFER.

Notwithstanding any other provision of the Offer, Purchaser shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange Act (relating to Parent’s obligation to pay for or return tendered Shares promptly after termination or withdrawal of the Offer), pay for, and (subject to any such rules or regulations) may, to the extent expressly permitted by the Merger Agreement, delay the acceptance for payment of any tendered Shares if, as of the Expiration Date:

•  A number of Shares which represents more than one-half of the number of Shares outstanding on a fully diluted basis has not been validly tendered and not withdrawn prior to the expiration of the Offer (the “Minimum Condition”).

•  The Company shall not have in all material respects performed all obligations and complied with all covenants required by the Merger Agreement to be performed or complied with by it prior to the expiration date of the Offer, and such failure to perform shall not have been cured prior to the Expiration Date.

•  There occurs and is continuing a “Company Material Adverse Effect” (as defined in the Merger Agreement).

•  A governmental entity shall have enacted, issued or entered any restraining order, injunction or similar order or legal restraint or prohibition which remains in effect that enjoins or otherwise prohibits consummation of the Offer or the Merger.

•  The Merger Agreement shall have been terminated by the Company, Purchaser or Parent in accordance with its terms.

•  Any of the representations and warranties of the Company shall not be true and correct in all respects as of the date upon which such representations and warranties must be true and correct except (subject to certain exceptions as specified in the Merger Agreement) where the failure to be so true and correct would not have, individually or in the aggregate, a Company Material Adverse Effect.

Subject to the limitations contained in the Merger Agreement, the foregoing conditions are for the sole benefit of Purchaser and may be asserted by Purchaser regardless of the circumstances giving rise to any such conditions and may be waived by Purchaser in whole or in part at any time and from time to time, in each case except for the Minimum Condition, in the exercise of the reasonable good faith judgment of Purchaser and subject to the terms of the Merger Agreement. The failure by Purchaser at any time to exercise any of the foregoing rights is not a waiver of any right.

15.   CERTAIN LEGAL MATTERS; REQUIRED REGULATORY APPROVALS.

General.  Except as otherwise set forth in this Offer to Purchase, Parent and Purchaser are not aware of any licenses or other regulatory permits which appear to be material to the business of the Company and which might be adversely affected by the acquisition of Shares by Purchaser or Parent pursuant to the Offer or of any approval or other action by any governmental, administrative or regulatory agency or authority which would be required for the acquisition or ownership of Shares by Purchaser or Parent pursuant to the Offer. In addition, except as set forth below, Parent and Purchaser are not aware of any filings, approvals or other actions by or with any governmental authority or administrative or regulatory agency that would be required for Parent’s and Purchaser’s acquisition or ownership of the Shares.

Antitrust Compliance.  Under the Hart-Scott-Rodino Act and the rules and regulations promulgated thereunder, the Merger may not be completed until the expiration of a 30-day waiting period following the filing of notification and report forms with the Federal Trade Commission (which we refer to as the “FTC”) and the Antitrust Division of the U.S. Department of Justice (which we refer to as the “Antitrust Division”) by the Company and Purchaser, unless a request for additional information and documentary material is received from the FTC or the Antitrust Division or unless early termination of the waiting period is granted. The parties filed their respective notification and report forms with the FTC and the Antitrust Division under the Hart-Scott-Rodino Act on December 20, 2006 and on January 3, 2006, the FTC granted early termination of the 30-day Hart-Scott-Rodino Act waiting period.

State Takeover Laws.  A number of states (including Delaware, where the Company is incorporated) have adopted takeover laws and regulations which purport, to varying degrees, to be applicable to attempts to acquire securities of corporations which are incorporated in such states or which have substantial assets, stockholders, principal executive offices or principal places of business therein. To the extent that certain provisions of certain of these state takeover statutes purport to

39

apply to the Offer or the Merger, Purchaser believes that such laws conflict with federal law and constitute an unconstitutional burden on interstate commerce.

Section 203 of the DGCL prevents certain “business combinations” with an “interested stockholder” (generally, any person who owns or has the right to acquire 15 percent or more of a corporation’s outstanding voting stock) for a period of three years following the time such person became an interested stockholder, unless, among other things, prior to the time the interested stockholder became such, the board of directors of the corporation approved either the business combination or the transaction in which the interested stockholder became such. The Company board of directors has irrevocably taken all necessary steps to render the restrictions of Section 203 of the DGCL inapplicable to the Offer, the Merger, the Merger Agreement and the transactions contemplated thereby.

Purchaser has not attempted to comply with any other state takeover statutes in connection with the Offer or the Merger. Purchaser reserves the right to challenge the validity or applicability of any state law allegedly applicable to the Offer, the Merger, the Merger Agreement or the transactions contemplated thereby, and nothing in this Offer to Purchase nor any action taken in connection herewith is intended as a waiver of that right. In the event that it is asserted that one or more takeover statutes apply to the Offer or the Merger, and it is not determined by an appropriate court that such statute or statutes do not apply or are invalid as applied to the Offer, the Merger or the Merger Agreement, as applicable, Purchaser may be required to file certain documents with, or receive approvals from, the relevant state authorities, and Purchaser might be unable to accept for payment or purchase Shares tendered pursuant to the Offer or be delayed in continuing or consummating the Offer. In such case, Purchaser may not be obligated to accept for purchase, or pay for, any Shares tendered.

Litigation.  On December 19, 2006, Call4U, Ltd. filed a complaint captioned Call4U, Ltd. v. ElkCorp., et al., C.A. No. 2623-N, in the Court of Chancery of the State of Delaware, Newcastle County. The complaint alleges that the plaintiff has brought the action on his own behalf and as a class action on behalf of all owners of the Company’s common stock and their successors in interest, except defendants and their affiliates, and names as defendants the Company, its directors, and The Carlyle Group. The Call4U Complaint alleges that the director defendants breached their fiduciary duties in connection with the Company’s entry into the Original Merger Agreement, and that The Carlyle Group aided and abetted those breaches of duty, and seeks relief including, among other things, preliminary and permanent injunctions prohibiting consummation of the merger under the Original Merger Agreement and an accounting for damages and profits.

On December 27, 2006, William E. Wetzel filed a complaint captioned William E. Wetzel v. Thomas D. Karol, et al., Cause No. CC-06-18562-B, in the County Court of Dallas County at Law No. 2, Dallas County, Texas. The complaint alleges that it is a shareholder derivative action on behalf of the Company as nominal defendant, and names as defendants the Company’s directors and The Carlyle Group. The complaint alleges that the director defendants breached their fiduciary duties and aided and abetted breaches of fiduciary duties in connection with the Company’s entry into the Original Merger Agreement, and that The Carlyle Group aided and abetted those breaches of duty, and seeks relief including, among other things, an injunction prohibiting consummation of the merger under the Original Merger Agreement, declaratory relief, and imposition of a constructive trust upon any benefits improperly received by the defendants.

16.   CERTAIN FEES AND EXPENSES.

Merrill Lynch & Co. has been retained by the Purchaser as Dealer Manager in connection with the Offer. The Purchaser has agreed to pay Merrill Lynch & Co. reasonable and customary compensation for its services and will reimburse them for certain out-of-pocket expenses. The Purchaser has agreed to indemnify Merrill Lynch & Co. and related parties against certain liabilities and expenses in connection with its engagement, including certain liabilities under the United States federal securities laws.

Innisfree M&A Incorporated has been retained by the Purchaser as Information Agent in connection with the Offer. The Information Agent may contact holders of Shares by mail, telephone, telex, telegraph and personal interview and may request brokers, dealers and other nominee stockholders to forward material relating to the Offer to beneficial owners. Customary compensation will be paid for all such services in addition to reimbursement of reasonable out-of-pocket expenses. The Purchaser has agreed to indemnify the Information Agent against certain liabilities and expenses, including liabilities under the federal securities laws.

Mellon Investor Services LLC has been retained by the Purchaser as the Depositary. The Depositary has not been retained to make solicitations or recommendations in its role as Depositary. The Depositary will receive reasonable and customary

40

compensation for its services in connection with the Offer, will be reimbursed for its reasonable out-of-pocket expenses, and will be indemnified against certain liabilities and expenses in connection therewith.

Except as set forth above, the Purchaser will not pay any fees or commissions to any broker, dealer or other person (other than the Information Agent) for soliciting tenders of Shares pursuant to the Offer. Brokers, dealers, commercial banks and trust companies and other nominees will, upon request, be reimbursed by the Purchaser for customary clerical and mailing expenses incurred by them in forwarding materials to their customers.

17.   MISCELLANEOUS.

The Offer is being made solely by this Offer to Purchase and the related Letter of Transmittal and is being made to all holders of the Shares (excluding Shares beneficially owned by the Purchaser). This Offer is not being made to (nor will tenders be accepted from or on behalf of) holders of Shares in any jurisdiction in which the making of this Offer or the acceptance thereof would not be in compliance with the securities or other laws of such jurisdiction. The Purchaser is not aware of any jurisdiction where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If the Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares pursuant thereto, the Purchaser will make a good faith effort to comply with such state statute. If, after such good faith effort the Purchaser cannot comply with any such state statute, the Offer will not be made to (nor will tenders be accepted from or on behalf of) the holders of Shares in such state. In those jurisdictions where the applicable laws require that the Offer be made by a licensed broker or dealer, the Offer shall be deemed to be made on behalf of the Purchaser by one or more registered brokers or dealers licensed under the laws of such jurisdiction.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF THE PURCHASER NOT CONTAINED IN THIS OFFER TO PURCHASE OR IN THE LETTER OF TRANSMITTAL, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.

Parent and the Purchaser have filed with the Commission a Tender Offer Statement on Schedule TO, together with exhibits, pursuant to Rule 14d-3 of the General Rules and Regulations promulgated under the Exchange Act, furnishing certain additional information with respect to the Offer, and may file amendments thereto. Such Schedule TO and any amendments thereto, including exhibits, may be examined and copies may be obtained from the same places and in the same manner as set forth in Section 8.

CGEA HOLDINGS, INC.

CGEA INVESTOR, INC.

January 18, 2007

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Schedule I

INFORMATION CONCERNING MEMBERS OF THE BOARD OF DIRECTORS AND
THE EXECUTIVE OFFICERS OF PARENT AND PURCHASER AND CONTROL PERSONS

Set forth below are the name, business address and current principal occupation or employment, and material occupations, positions, offices or employment for the past five years, of the directors and officers of Parent and Purchaser and their noteworthy affiliates. The business address of each person listed below is 1001 Pennsylvania Avenue, NW, Suite 220 South, Washington DC 20004.

The sole officers and directors of Parent and Purchaser are Messrs. Sameer Bhargava and Glenn A. Youngkin. Parent is a wholly owned subsidiary of Carlyle Partners IV, L.P., a Delaware limited partnership which is referred to in the Offer to Purchase as the Sponsor. TCG Holdings, L.L.C exercises investment discretion and control over the Sponsor through a series of direct and indirect subsidiaries organized as limited liability companies and limited partnerships. TCG Holdings, L.L.C. is managed by a three-person managing board and all board action relating to the Sponsor requires the approval of a majority of the board. The members of the managing board of TCG Holdings, L.L.C. are Messrs. William E. Conway, Jr., Daniel A. D’Aniello and David M. Rubenstein.

None of the persons listed below has, during the past five years, (i) been convicted in a criminal proceeding or (ii) been a party to any judicial or administrative proceeding that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, U.S. federal or state securities laws, or a finding of any violation of U.S. federal or state securities laws. All persons listed below are citizens of the United States.

Name	Current Principal Occupation or Employment and Five-Year Employment History
1. Parent and Purchaser
Sameer Bhargava	Currently, Mr. Bhargava is the Vice President, Secretary, Treasurer and a director of CGEA Investor, Inc. and CGEA Holdings, Inc. Since January 2007, Mr. Bhargava has served as Principal at The Carlyle Group. From May 2003 to December 2006, Mr. Bhargava served as Vice-President at The Carlyle Group. From September 2000 until May 2003, Mr. Bhargava served as an Associate at Bain Capital, 111 Huntington Avenue, Boston, MA 02199.
Glenn A. Youngkin	Currently, Mr. Youngkin is the President and a director of CGEA Investor, Inc. and CGEA Holdings, Inc. Since January 2006, Mr. Youngkin has served as Managing Director, Global Head-Industrials, at The Carlyle Group. From January 2000 to December 2005, Mr. Youngkin served as Managing Director at The Carlyle Group, 57 Barclay Square, London, W1J 6ER United Kingdom.
2. Sponsor
William E. Conway, Jr.	Mr. Conway is a Founding Partner and Managing Director and is based in Washington, DC and has served in this capacity since Carlyle’s inception in 1987.
Daniel A. D’Aniello	Mr. D’Aniello is a Founding Partner and Managing Director and is based in Washington, DC and has served in this capacity since Carlyle’s inception in 1987.
David M. Rubenstein	Mr. Rubenstein is a Founding Partner and Managing Director and is based in Washington, DC and has served in this capacity since Carlyle’s inception in 1987.

i

EX-99.(A)(1)(B)

Exhibit (a)(1)(B)

LETTER OF TRANSMITTAL

to

Tender Shares of Common Stock

(including the Associated Series A Participating Preferred Stock Purchase Rights)

of

ElkCorp

Pursuant to the Offer to Purchase

Dated January 18, 2007

at

$40.50 Net Per Share in Cash

(CUSIP Number of Class of Securities: 287456107)

by

CGEA Investor, Inc.

a wholly owned subsidiary of

CGEA Holdings, Inc.

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON FEBRUARY 14, 2007, UNLESS THE OFFER IS EXTENDED.

The Depositary For The Offer Is:

Mellon Investor Services LLC

By Mail:	By Overnight Courier:	By Hand:
Reorganization Department PO Box 3448 South Hackensack, NJ 07606 Attn: Reorganization Department	Reorganization Department 480 Washington Boulevard Mail Drop — Reorganization Jersey City, NJ 07310 Attn: Reorganization Department 27th Floor	Reorganization Department 120 Broadway, 13th Floor New York, NY 10271 Attn: Reorganization Department

By Facsimile Transmission:

(For Eligible Institutions Only)

(201) 680-4626

To Confirm Facsimile Only:

(201) 680-4860

DESCRIPTION OF SHARES TENDERED
Name(s) and Address(es) of Registered Holder(s)
(Please fill in, if blank, exactly as Name(s)	Stock Certificate(s) Tendered
appear(s) on Stock Certificate(s))	(Attach additional list if necessary)
		Total Number of
	Stock	Shares Evidenced	Number of
	Certificate	by Stock	Shares
	Number(s)*	Certificate(s)*	Tendered**
	Total Shares
* Need not be completed by Stockholders tendering Shares by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares evidenced by any Stock Certificates delivered to the Depositary are being tendered. See Instruction 5.

DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE TO A NUMBER OTHER THAN SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY FOR THE OFFER. YOU MUST SIGN THIS LETTER OF TRANSMITTAL IN THE APPROPRIATE SPACE PROVIDED BELOW, WITH SIGNATURE GUARANTEE IF REQUIRED, AND COMPLETE THE SUBSTITUTE FORM W-9 SET FORTH BELOW.

THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

THIS LETTER OF TRANSMITTAL IS TO BE COMPLETED BY STOCKHOLDERS EITHER IF CERTIFICATES EVIDENCING SHARES (AS DEFINED BELOW) ARE TO BE FORWARDED HEREWITH OR IF DELIVERY OF SHARES IS TO BE MADE BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY’S ACCOUNT AT MELLON INVESTOR SERVICES LLC (THE “BOOK-ENTRY TRANSFER FACILITY”) PURSUANT TO THE BOOK-ENTRY TRANSFER PROCEDURE DESCRIBED IN SECTION 3 OF THE OFFER TO PURCHASE (AS DEFINED BELOW). DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.

PARTICIPANTS IN THE ELKCORP EMPLOYEE STOCK OWNERSHIP PLAN (THE “ESOP”) MUST TENDER THE SHARES HELD ON THEIR BEHALF IN THE ESOP THROUGH THE TRUSTEE DIRECTION FORM, NOT THIS LETTER OF TRANSMITTAL.

PARTICIPANTS IN THE ELCOR EMPLOYEE STOCK PURCHASE PLAN AND PEAK PERFORMANCE CONTRACTOR PROGRAM (THE “PURCHASE PLANS”) WHO WISH TO TENDER SHARES THEY HOLD INDIRECTLY THROUGH SUCH PURCHASE PLANS MUST COMPLETE THIS LETTER OF TRANSMITTAL AND DELIVER IT TO THE DEPOSITARY NO LATER THAN TWO BUSINESS DAYS PRIOR TO THE EXPIRATION OF THE OFFER.

Holders of outstanding shares of common stock, par value $1.00 per share (the “Shares”), of ElkCorp (the “Company”), (i) if certificates evidencing the Shares are not immediately available, (ii) if Share Certificates (as defined below) and all other required documents cannot be delivered to Mellon Investor Services LLC (the “Depositary”) or (iii) if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Depositary on or prior to the Expiration Date (as defined in the Offer to Purchase, dated January 18, 2007 (the “Offer to Purchase”)), must deliver their Shares according to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.

2

o  CHECK HERE IF SHARES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER TO THE DEPOSITARY’S ACCOUNT AT ONE OF THE BOOK-ENTRY TRANSFER FACILITIES AND COMPLETE THE FOLLOWING:

Name(s) of Tendering Institution: _ _

Account Number: _ _

Transaction Code Number: _ _

o  CHECK HERE IF SHARES ARE BEING TENDERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE DEPOSITARY AND COMPLETE THE FOLLOWING:

Name(s) of Registered Holder(s): _ _

Window Ticket Number (if any): _ _

Date of Execution of Notice of Guaranteed Delivery: _ _

Name of Institution which Guaranteed Delivery: _ _

If Delivered by Book-Entry Transfer, Check Box: o

Account Number: _ _

Transaction Code Number: _ _

NOTE:  SIGNATURES MUST BE PROVIDED AT THE END OF THIS LETTER OF TRANSMITTAL. PLEASE READ THE INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL CAREFULLY.

3

Ladies and Gentlemen:

The undersigned hereby tenders to CGEA Investor, Inc. (“Purchaser”), a Delaware corporation and wholly owned subsidiary of CGEA Holdings, Inc. (“Parent”), the above-described shares of common stock, par value $1.00 per share (“Shares”) of ElkCorp, a Delaware corporation (the “Company”), pursuant to the Purchaser’s offer to purchase all of the outstanding Shares, and the associated Series A Participating Preferred Stock purchase rights, at $40.50 per share, net to the seller in cash (subject to applicable withholding taxes), without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase, dated January 18, 2007 (the “Offer to Purchase”), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which together, as each may be amended or supplemented from time to time, constitute the “Offer”). The Purchaser reserves the right to transfer or assign, in whole or from time to time in part, to one or more of its affiliates the right to purchase Shares tendered pursuant to the Offer, but any such transfer or assignment will not relieve the Purchaser (or Parent) of its obligations under the Offer or prejudice your rights to receive payment for Shares validly tendered and accepted for payment.

Subject to, and effective upon, acceptance for payment of Shares tendered herewith, in accordance with the terms of the Offer (including, if the Offer is extended or amended, the terms and conditions of such extension or amendment), the undersigned hereby sells, assigns and transfers to, or upon the order of, the Purchaser all right, title and interest in and to all Shares that are being tendered hereby and all dividends, distributions (including, without limitation, distributions of additional Shares) and rights declared, paid or distributed in respect of such Shares on or after the date of the Offer (collectively, “Distributions”) and irrevocably appoints the Depositary the true and lawful agent and attorney-in-fact of the undersigned with respect to such Shares and any and all Distributions, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest), to (i) deliver Share Certificates evidencing such Shares and all Distributions, or transfer ownership of such Shares and all Distributions on the account books maintained by a Book-Entry Transfer Facility, together, in either case, with all accompanying evidences of transfer and authenticity, to or upon the order of the Purchaser, (ii) present such Shares and all Distributions for transfer on the books of the Company and (iii) receive all benefits and otherwise exercise all rights of beneficial ownership of such Shares and all Distributions, all in accordance with the terms of the Offer.

By executing this Letter of Transmittal, the undersigned irrevocably appoints designees of the Purchaser as attorneys-in-fact and proxies of the undersigned, in the manner set forth in this Letter of Transmittal, each with full power of substitution, to the full extent of the undersigned’s rights with respect to (a) the Shares tendered by the undersigned and accepted for payment by the Purchaser and (b) any and all non-cash dividends, distributions, rights or other securities issued or issuable on or after the date of the Offer to Purchase in respect of such tendered and accepted Shares. All such proxies shall be considered coupled with an interest in the tendered Shares. This appointment will be effective if, when and only to the extent that the Purchaser accepts such Shares for payment pursuant to the Offer. Upon such acceptance for payment, all prior proxies given by such stockholder with respect to such Shares and other securities will, without further action, be revoked, and no subsequent proxies may be given nor any subsequent written consents executed (and, if given or executed, will not be deemed effective). The designees of the Purchaser will, with respect to the Shares and other securities for which the appointment is effective, be empowered to exercise all voting and other rights of such stockholder as they, in their sole discretion, may deem proper at any annual, special, adjourned or postponed meeting of the Company’s stockholders, and the Purchaser reserves the right to require that in order for Shares or other securities to be deemed validly tendered, immediately upon the Purchaser’s acceptance for payment of such Shares, the Purchaser must be able to exercise full voting rights with respect to such Shares. The foregoing proxies are effective only upon acceptance for payment of Shares pursuant to the Offer.

The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer Shares tendered hereby and all Distributions, and that when such Shares are accepted for payment by the Purchaser, the Purchaser will acquire good, marketable and unencumbered title thereto and to all Distributions, free and clear of all liens, restrictions, charges and encumbrances (other than those resulting from action of the Purchaser or any of its subsidiaries), and that none of such Shares and Distributions will be subject to any adverse claim (other than those resulting from action of the Purchaser or any of its affiliates). The undersigned, upon request, shall execute and deliver all additional documents deemed by the Depositary or the Purchaser to be necessary or desirable to complete the sale, assignment and transfer of Shares tendered hereby and all Distributions. In addition, the undersigned shall remit and transfer promptly to the Depositary for the account of the Purchaser, all Distributions in respect of Shares tendered hereby, accompanied by appropriate documentation of transfer, and, pending such remittance and transfer or appropriate assurance thereof, the Purchaser shall be entitled to all rights and privileges as owner of each such Distribution and may withhold the entire purchase price of Shares tendered hereby or deduct from such purchase price the amount or value of such Distribution as determined by the Purchaser in its sole discretion.

4

All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned, and any obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned. Except as stated in the Offer, this tender is irrevocable.

The undersigned understands that tenders of Shares pursuant to any one of the procedures described in Section 3 of the Offer to Purchase and in the instructions hereto will constitute a binding agreement between the undersigned and the Purchaser upon the terms and subject to the conditions of the Offer, including, without limitation, the undersigned’s representation and warranty that the undersigned owns all Shares being tendered.

SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6, 7 AND 8)

To be completed ONLY if the check for the purchase price of Shares purchased or Share Certificates evidencing Shares not tendered or not purchased are to be issued in the name of someone other than the undersigned. Or if Shares tendered hereby and delivered by book-entry transfer that are not purchased are to be returned by credit to an account maintained at the Book-Entry Transfer Facility other than the account indicated above.

Issue o  Check o  Share Certificate(s) to:

Name:

(Print)

Address:

(Include Zip Code)

(Taxpayer Identification or Social Security Number)

(See Substitute Form W-9 Included Herein)

o  Credit Shares delivered by book-entry transfer and not purchased to the Holders Book-Entry Transfer Facility Account

Account Number

SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 6, 7 AND 8)

To be completed ONLY if the check for the purchase price of Shares purchased or Share Certificates evidencing Shares not tendered or not purchased are to be mailed to someone other than the undersigned, or to the undersigned at an address other than that shown under “Description of Shares Tendered.”

Issue o  Check o  Share Certificate(s) to:

Name:

(Print)

Address:

(Include Zip Code)

5

IMPORTANT:

STOCKHOLDERS

SIGN HERE

(PLEASE COMPLETE SUBSTITUTE FORM W-9 INCLUDED HEREIN)

Signature(s) of Holder(s)

Date:          , 200

(Must be signed by registered holder(s) exactly as name(s) appear(s) on Share Certificates or on a security position listing or by a person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, please provide the following information. See Instruction 6.)

Name(s): _ _

(Please Print)

Capacity (full title): _ _

Address: _ _

(Include Zip Code)

Area Code and Telephone Number: _ _

Tax Identification or Social Security Number: _ _)

(SEE SUBSTITUTE FORM W-9 INCLUDED HEREIN)

GUARANTEE OF SIGNATURE(S)

(IF REQUIRED — SEE INSTRUCTIONS 1 AND 6)

FOR USE BY FINANCIAL INSTITUTIONS ONLY.

PLACE MEDALLION GUARANTEE IN SPACE BELOW.

Authorized Signature: _ _

Name(s): _ _

(Please Print)

Name of Firm: _ _

Address: _ _

(Include Zip Code)

Area Code and Telephone Number: _ _

Date:          , 200

6

INSTRUCTIONS

FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

1.   Guarantee of Signatures.

Except as otherwise provided below, all signatures on this Letter of Transmittal must be guaranteed by a financial institution (including most commercial banks, savings and loan associations and brokerage houses) that is a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program or any other “eligible guarantor institution” (as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended) (each an “Eligible Institution”). Signatures on this Letter of Transmittal need not be guaranteed (i) if this Letter of Transmittal is signed by the registered holder(s) of the Shares (which term, for purposes of this document, shall include any participant in the Book-Entry Transfer Facility whose name appears on a security position listing as the owner of Shares) tendered herewith and such holder(s) have not completed the instruction entitled “Special Payment Instructions” or “Special Delivery Instructions” on this Letter of Transmittal or (ii) if such Shares are tendered for the account of an Eligible Institution. See Instruction 5.

2.   Delivery of Letter of Transmittal and Shares.

This Letter of Transmittal is to be used if share certificates representing one or more Shares (the “Share Certificates”) are to be forwarded herewith or, unless an Agent’s Message (as defined in the Offer to Purchase) is utilized, if deliveries are to be made by book-entry transfer pursuant to the procedures set forth in Section 3 of the Offer to Purchase. Share Certificates for all physically delivered Shares, or a confirmation of a book-entry transfer into the Depositary’s account at the Book-Entry Transfer Facility, as well as a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) and any other documents required by this Letter of Transmittal, or an Agent’s Message in the case of a book-entry transfer, must be received by the Depositary at one of its addresses set forth on the front page of this Letter of Transmittal by the Expiration Date (as defined in the Offer to Purchase). If Share Certificates are forwarded to the Depositary in multiple deliveries, a properly completed and duly executed Letter of Transmittal must accompany each such delivery. Stockholders whose Share Certificates are not immediately available, who cannot deliver their Share Certificates and all other required documents to the Depositary prior to the Expiration Date or who cannot complete the procedure for delivery by book-entry transfer on a timely basis, may tender their Shares pursuant to the guaranteed delivery procedure described in Section 3 of the Offer to Purchase. Pursuant to such procedure: (a) such tender must be made by or through an Eligible Institution; (b) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form provided by the Purchaser, must be received by the Depositary on or prior to the Expiration Date; and (c) Share Certificates representing tendered Shares in proper form for tender, or a confirmation of a book-entry transfer into the Depositary’s account at the Book-Entry Transfer Facility of all Shares, as well as a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof), and any other documents required by this Letter of Transmittal, must be received by the Depositary within three New York Stock Exchange trading days of the date of execution of such Notice of Guaranteed Delivery as provided in Section 3 of the Offer to Purchase.

THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, SHARE CERTIFICATES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH ANY BOOK-ENTRY TRANSFER FACILITY, IS AT THE ELECTION AND SOLE RISK OF THE UNDERSIGNED, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

No alternative, conditional or contingent tenders will be accepted, and no fractional Shares will be purchased. By executing this Letter of Transmittal, the undersigned waives any right to receive any notice of the acceptance for payment of the Shares.

3.   ESOP.

This Letter of Transmittal should not be used to tender any shares owned indirectly through the ESOP. Instead, participants in the ESOP should complete the Trustee Direction Form according to its instructions. However, if participants in the ESOP also own shares outside the ESOP, then such participants must complete both the Trustee Direction Form and the Letter of Transmittal if they wish to tender shares from both accounts.

7

4.   Company Employee Stock Purchase Plan and Peak Performance Contractor Program.

Participants in the Purchase Plans may use this Letter of Transmittal to tender Shares held in their Purchase Plan accounts. In order for Shares to be tendered from the Purchase Plans, participants must complete this Letter of Transmittal and deliver it to the Depositary for receipt no later than two business days prior to the expiration of the Offer.

5.   Inadequate Space.

If the space provided herein is inadequate, the Share Certificate numbers, the number of Shares evidenced by such Share Certificates and the number of Shares tendered should be listed on a separate signed schedule and attached hereto.

6.   Partial Tenders (not applicable to stockholders who tender by book-entry transfer).

If fewer than all the Shares represented by any Share Certificate delivered to the Depositary are to be tendered, fill in the number of Shares which are to be tendered in the box entitled “Number of Shares Tendered.” In such case, a new certificate for the remainder of the Shares represented by the old certificate will be sent to the person(s) signing this Letter of Transmittal, unless otherwise provided in the appropriate box on this Letter of Transmittal, as promptly as practicable following the expiration or termination of the Offer. All Shares represented by certificates delivered to the Depositary will be deemed to have been tendered unless otherwise indicated.

7.   Signatures on Letter of Transmittal; Stock Powers and Endorsements.

If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, the signature(s) must correspond with the name(s) as written on the face of the Share Certificates without alteration, enlargement or any change whatsoever.

If any of the Shares tendered hereby are held of record by two or more persons, all such persons must sign this Letter of Transmittal.

If any of the Shares tendered hereby are registered in names of different holders, it will be necessary to complete, sign and submit as many separate Letters of Transmittal as there are different registrations of certificates.

If this Letter of Transmittal is signed by the registered holder(s) of the Shares tendered hereby, no endorsements of certificates or separate stock powers are required unless payment of the purchase price is to be made, or Shares not tendered or not purchased are to be returned, in the name of any person other than the registered holder(s). Signatures on any such certificates or stock powers must be guaranteed by an Eligible Institution.

If this Letter of Transmittal is signed by a person other than the registered holder(s) of the Shares tendered hereby, certificates must be endorsed or accompanied by appropriate stock powers, in either case, signed exactly as the name(s) of the registered holder(s) appear(s) on the certificates for such Shares. Signature(s) on any such certificates or stock powers must be guaranteed by an Eligible Institution.

If this Letter of Transmittal or any certificate or stock power is signed by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, such person should so indicate when signing, and proper evidence satisfactory to the Purchaser of the authority of such person so to act must be submitted.

8.   Stock Transfer Taxes.

The Purchaser will pay any stock transfer taxes with respect to the sale and transfer of any Shares to it or its order pursuant to the Offer. If, however, payment of the purchase price is to be made to, or Shares not tendered or not purchased are to be returned in the name of, any person other than the registered holder(s), or if a transfer tax is imposed for any reason other than the sale or transfer of Shares to the Purchaser pursuant to the Offer, then the amount of any stock transfer taxes (whether imposed on the registered holder(s), such other person or otherwise) will be deducted from the purchase price unless satisfactory evidence of the payment of such taxes, or exemption therefrom, is submitted herewith.

Except as provided in this Instruction 7, it will not be necessary for transfer tax stamps to be affixed to the Share Certificates evidencing the Shares tendered hereby.

8

9.   Special Payment and Delivery Instructions.

If the check for the purchase price of any Shares purchased is to be issued, or any Shares not tendered or not purchased are to be returned, in the name of a person other than the person(s) signing this Letter of Transmittal or if the check or any certificates for Shares not tendered or not purchased are to be mailed to someone other than the person(s) signing this Letter of Transmittal or to the person(s) signing this Letter of Transmittal at an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Stockholders tendering Shares by book-entry transfer may request that Shares not purchased be credited to such account at the Book-Entry Transfer Facility as such stockholder may designate under “Special Payment Instructions.” If no such instructions are given, any such Shares not purchased will be returned by crediting the account at the Book-Entry Transfer Facility designated above.

10.   Substitute Form W-9.

Under the federal income tax laws, the Depositary will be required to withhold a portion of the amount of any payments made to certain stockholders pursuant to the Offer. In order to avoid such backup withholding, each tendering stockholder that is a United States citizen, resident or entity, and, if applicable, each other United States payee, must provide the Depositary with such stockholder’s or payee’s correct taxpayer identification number (“TIN”) and certify that such stockholder or payee is not subject to such backup withholding by completing the attached Substitute Form W-9. Certain stockholders or payees (including, among others, corporations, non-resident foreign individuals and foreign entities) are not subject to these backup withholding and reporting requirements. For further information concerning backup withholding see “IMPORTANT TAX INFORMATION” BELOW.

Failure to complete the Substitute Form W-9 will not, by itself, cause Shares to be deemed invalidly tendered, but may require the Depositary to withhold a portion of the amount of any payments made pursuant to the Offer. NOTE: FAILURE TO COMPLETE AND RETURN THE SUBSTITUTE FORM W-9 MAY RESULT IN BACKUP WITHHOLDING OF A PORTION OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE “IMPORTANT TAX INFORMATION” SECTION BELOW AND THE ENCLOSED “GUIDELINES FOR CERTIFICATION OF TIN ON SUBSTITUTE FORM W-9” FOR ADDITIONAL DETAILS.

11.   Mutilated, Lost, Stolen or Destroyed Certificates.

Any holder of a certificate(s) which represented Shares whose certificate(s) has been mutilated, lost, stolen, or destroyed should (i) complete this Letter of Transmittal and check the appropriate box above and (ii) contact the Depositary or the Company immediately. The Depositary will provide such holder with all necessary forms and instructions to replace any mutilated, lost, stolen or destroyed certificates. The holder may also be required to give the Company a bond as indemnity against any claim that may be made against it with respect to the certificate(s) alleged to have been mutilated, lost, stolen, or destroyed. However, there can be no assurances that such mutilated, lost, stolen or destroyed certificates will be replaced prior to the expiration date of the Offer.

12.   Waiver of Conditions.

Except as otherwise provided in the Offer to Purchase, Purchaser reserves the right in its sole discretion to waive in whole or in part at any time or from time to time any of the specified conditions of the Offer or any defect or irregularity in tender with regard to any Shares tendered.

13.   Requests for Assistance or Additional Copies.

Any questions and requests for assistance may be directed to the Information Agent at the address and telephone number set forth on the back cover of this Letter of Transmittal. Additional copies of the Offer to Purchase, this Letter of Transmittal, the Notice of Guaranteed Delivery and other related materials may be obtained from the Information Agent.

IMPORTANT:  THIS LETTER OF TRANSMITTAL (OR FACSIMILE HEREOF), PROPERLY COMPLETED AND DULY EXECUTED (TOGETHER WITH ANY REQUIRED SIGNATURE GUARANTEES AND SHARE CERTIFICATES OR CONFIRMATION OF BOOK-ENTRY TRANSFER AND ALL OTHER REQUIRED DOCUMENTS) OR A PROPERLY COMPLETED AND DULY EXECUTED NOTICE OF GUARANTEED DELIVERY

9

MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE).

IMPORTANT TAX INFORMATION

Under the federal income tax law, a stockholder whose tendered Shares are accepted for payment is required by law to provide the Depositary (as payer) with such stockholder’s correct TIN on Substitute Form W-9 below. If such stockholder is an individual, the TIN is such stockholder’s social security number. If the Depositary is not provided with the correct TIN, the stockholder may be subject to penalties imposed by the Internal Revenue Service (“IRS”) and payments that are made to such stockholder with respect to Shares purchased pursuant to the Offer may be subject to backup withholding.

Certain stockholders (including, among others, corporations, non-resident foreign individuals and foreign entities) are not subject to these backup withholding and reporting requirements. In order for a foreign stockholder to qualify as an exempt recipient, such stockholder must submit the appropriate IRS Form W-8, signed under penalties of perjury, attesting to such individual’s foreign status. Each IRS Form W-8 is available on the IRS website (www.irs.gov) or can be obtained from the Depositary.

If backup withholding applies, the Depositary is required to withhold 28% of any payments made to the stockholder. Backup withholding is not an additional tax. Rather, the tax liability of persons subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the IRS provided that the required information is furnished to the IRS.

For further information concerning backup withholding and instructions for completing the Substitute Form W-9 (including how to obtain a TIN if you do not have one and how to complete the Substitute Form W-9 if Shares are held in more than one name), consult the enclosed “Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.”

Purpose of Substitute Form W-9

To prevent backup withholding on payments that are made to a United States stockholder with respect to Shares purchased pursuant to the Offer, the stockholder is required to notify the Depositary of such stockholder’s correct TIN by completing the form below certifying (i) that the TIN provided on Substitute Form W-9 is correct (or that such stockholder is awaiting a TIN) and (ii) that such stockholder is not subject to backup withholding because (a) such stockholder has not been notified by the IRS that such stockholder is subject to backup withholding as a result of a failure to report all interest or dividends, (b) the IRS has notified such stockholder that such stockholder is no longer subject to backup withholding or (c) such stockholder is exempt from backup withholding.

What Number to Give the Depositary

United States stockholders are required to give the Depositary the social security number or employer identification number of the record holder of the Shares tendered hereby. If the Shares are in more than one name or are not in the name of the actual owner, consult the enclosed Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 for additional guidance on which number to report. If the tendering stockholder has not been issued a TIN and has applied for a number or intends to apply for a number in the near future, the stockholder should check the “Awaiting TIN” box in Part II, sign and date the Substitute Form W-9 and complete the Certificate of Awaiting Taxpayer Identification Number below. Notwithstanding that the “Awaiting TIN” box is checked in Part II and the Certificate of Awaiting Taxpayer Identification Number is completed, the Depositary will withhold 28% of all payments of the purchase price to such stockholder until a TIN is provided to the Depositary. Such amounts will be refunded to such surrendering stockholder if a TIN is provided to the Depositary within 60 days.

10

PAYOR’S NAME:
SUBSTITUTE FORM W-9	Name: _ _
	Address: _ _
	(Number and Street)
	(City)                                                 (State)                                     (Zip Code)
Department of the Treasury Internal Revenue Service	Check appropriate box: Individual/Sole Proprietoro Partnershipo	Corporationo Other (specify)o	Exempt from Backup Withholdingo
Request for Taxpayer Identification Number (TIN) and Certification	Part I — Please provide your taxpayer or identification number in the space at right. If awaiting TIN, write “Applied For.”		SSN: _ _or EIN: _ _
	Part II. — Awaiting TIN o
	Part III. — Certification
	Under penalties of perjury, I certify that:
	(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me);
	(2) I am not subject to backup withholding either because (a) I am exempt from backup withholding, (b) I have not been notified by the IRS that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and
	(3) I am a United States person (including a United States resident alien).
	Certification Instructions — You must cross out item (2) in Part III above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding you received notification from the IRS that you are no longer subject to backup withholding, do not cross out item (2).
Sign Here à	Signature: _ _Date: _ _

NOTE:  FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN A $50 PENALTY IMPOSED BY THE INTERNAL REVENUE SERVICE AND BACKUP WITHHOLDING OF 28% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.

NOTE:  YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART II OF THE SUBSTITUTE FORM W-9.

CERTIFICATION OF AWAITING TAXPAYER IDENTIFICATION NUMBER

I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (1) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration office or (2) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of payment, 28% of all reportable payments made to me thereafter will be withheld until I provide a taxpayer identification number to the payer and that, if I do not provide my taxpayer identification number within sixty days, such retained amounts shall be remitted to the Internal Revenue Service as backup withholding.

Signature _ _  Date_ _

11

Any questions and requests for assistance may be directed to the Information Agent at the address and telephone number set forth below. Additional copies of the Offer to Purchase, the Letter of Transmittal and the Notice of Guaranteed Delivery may be obtained from the Information Agent at the address and telephone number set forth below. Holders of Shares may also contact their broker, dealer, commercial bank or trust company or other nominee for assistance concerning the Offer.

The Information Agent for the Offer is:

Innisfree M&A Incorporated

(888) 750-5834 or collect at (212) 750-5833

12

EX-99.(A)(1)(C)

Exhibit (a)(1)(C)

NOTICE OF GUARANTEED DELIVERY

to

Tender Shares of Common Stock

(including the Associated Series A Participating Preferred Stock Purchase Rights)

of

ElkCorp

to

CGEA Investor, Inc.

a wholly owned subsidiary of

CGEA Holdings, Inc.

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON FEBRUARY 14, 2007, UNLESS THE OFFER IS EXTENDED.

(Not be used for Signature Guarantees)

This Notice of Guaranteed Delivery, or a form substantially equivalent to this form, must be used to accept the Offer (as defined below) (i) if certificates evidencing shares of common stock, par value $1.00 per share (the “Shares”), of ElkCorp, a Delaware corporation (the “Company”), are not immediately available, (ii) if share certificates and all other required documents cannot be delivered to Mellon Investor Services LLC (the “Depositary”) or (iii) if the procedure for book-entry transfer cannot be completed on a timely basis or time will not permit all required documents to reach the Depositary on or prior to the Expiration Date (as defined in the Offer to Purchase, dated January 18, 2007 (the “Offer to Purchase”)). This Notice of Guaranteed Delivery may be delivered by hand or facsimile transmission or mail to the Depositary. See Section 3 of the Offer to Purchase.

The Depositary For The Offer Is:

Mellon Investor Services LLC

By Mail:	By Overnight Courier:	By Hand:
Reorganization Department PO Box 3448 South Hackensack, NJ 07606 Attn: Reorganization Department	Reorganization Department 480 Washington Boulevard Mail Drop — Reorganization Jersey City, NJ 07310 Attn: Reorganization Department 27th Floor	Reorganization Department 120 Broadway, 13th Floor New York, NY 10271 Attn: Reorganization Department

By Facsimile Transmission:

(For Eligible Institutions Only)

(201) 680-4626

To Confirm Facsimile Only:

(201) 680-4860

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA FACSIMILE TRANSMISSION TO A NUMBER OTHER THAN AS LISTED ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.

THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN “ELIGIBLE INSTITUTION” UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.

Ladies and Gentlemen:

The undersigned hereby tenders to CGEA Investor, Inc. (“Purchaser”), a Delaware corporation and wholly owned subsidiary of CGEA Holdings, Inc. (“Parent”) upon the terms and subject to the conditions set forth in the Offer to Purchase, dated January 18, 2007 and the related Letter of Transmittal (which together, as amended, supplemented or otherwise modified from time to time, constitute the “Offer”), receipt of which is hereby acknowledged, the number of Shares specified below pursuant to the guaranteed delivery procedure set forth in Section 3 of the Offer to Purchase.

Number of Shares:

Certificate Nos. (if available):

Check box if Shares will be tendered by book-entry transfer:  o

Account Number: 

Dated: _ _, 200  

Name(s) of Record Holder(s):

(Please Print)

Address(es): 

(Zip Code)

Area Code and Tel. No.: 

Signature(s): 

2

GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEES)

The undersigned, a firm which is a bank, broker, dealer, credit union, savings association or other entity that is a participant in the Security Transfer Agents Medallion Program, the New York Stock Exchange Medallion Signature Guarantee Program or the Stock Exchange Medallion Program or any other “eligible guarantor institution” (as such term is defined in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended), guarantees (a) that the above named person(s) “own(s)” the Shares tendered hereby within the meaning of Rule 14e-4 under the Securities Exchange Act of 1934, (b) that such tender of Shares complies with Rule 14e-4 and (c) delivery to the Depositary of the Shares tendered hereby, in proper form of transfer, or a Book-Entry Confirmation (as defined in the Offer to Purchase), together with a properly completed and duly executed Letter of Transmittal (or a manually signed facsimile thereof) with any required signature guarantees, or an Agent’s Message (as defined in the Offer to Purchase) in the case of a book-entry delivery, and any other required documents, within three New York Stock Exchange trading days after the date hereof.

The Eligible Institution that completes this form must communicate the guarantees to the Depositary and must deliver the Letter of Transmittal and certificates for Shares to the Depositary within the time period shown herein. Failure to do so could result in a financial loss to such Eligible Institution.

Name of Firm:

Address:

Zip Code

Area Code and Tel. No.: 

Authorized Signature

Name: 

Please Print

Title:

Dated: _ _, 200  

NOTE:  DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES SHOULD BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.

3

EX-99.(A)(1)(D)

Exhibit (a)(1)(D)

OFFER TO PURCHASE FOR CASH

All Outstanding Shares of Common Stock

(including the Associated Series A Participating Preferred Stock Purchase Rights)

of

ElkCorp

at

$40.50 Net Per Share in Cash

by

CGEA Investor, Inc.

a wholly owned subsidiary of

CGEA Holdings, Inc.

January 18, 2007

To Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees:

CGEA Investor, Inc. (“Purchaser”), a Delaware corporation and wholly owned subsidiary of CGEA Holdings, Inc. (“Parent”), is offering to purchase all the outstanding shares of common stock, par value $1.00 per share (the “Shares”), of ElkCorp, a Delaware corporation (the “Company”), and the associated Series A Participating Preferred Stock purchase rights (the “Rights”) at a price of $40.50 per share net to the seller in cash (subject to applicable withholding taxes), without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated January 18, 2007 (the “Offer to Purchase”) and the related Letter of Transmittal (which together, as amended, supplemented or otherwise modified from time to time constitute the “Offer”).

For your information and for forwarding to your clients for whom you hold Shares registered in your name or in the name of your nominee, we are enclosing the following documents:

1. Offer to Purchase, dated January 18, 2007;

2. Letter of Transmittal, including a Substitute Form W-9, for your use and for the information of your clients;

3. Notice of Guaranteed Delivery, to be used to accept the Offer if the Shares and all other required documents cannot be delivered to Mellon Investor Services LLC, the Depositary for the Offer, by the expiration of the Offer;

4. A form of letter which may be sent to your clients for whose accounts you hold Shares registered in your name or in the name of your nominee, with space provided for obtaining such clients’ instructions with regard to the Offer;

5. Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9 providing information relating to backup federal income tax withholding; and

6. Return envelope addressed to the Depositary.

WE URGE YOU TO CONTACT YOUR CLIENTS AS PROMPTLY AS POSSIBLE.

THE OFFER EXPIRES AT MIDNIGHT, NEW YORK CITY TIME, ON FEBRUARY 14, 2007, UNLESS THE OFFER IS EXTENDED. SHARES TENDERED UNDER THE OFFER MAY BE WITHDRAWN AT ANY TIME ON OR BEFORE THE EXPIRATION DATE AND, UNLESS THERETOFORE ACCEPTED FOR PAYMENT AS PROVIDED HEREIN, MAY ALSO BE WITHDRAWN AT ANY TIME AFTER MARCH 18, 2007 (OR SUCH LATER DATE AS MAY APPLY IF THE OFFER IS EXTENDED).

The Purchaser will not pay any fees or commissions to any broker, dealer or other person (other than Innisfree M&A Incorporated (the “Information Agent”) or Mellon Investor Services LLC (the “Depositary”)) for soliciting tenders of Shares pursuant to the Offer. The Purchaser will, however, upon request, reimburse brokers, dealers, banks and trust companies for reasonable and necessary costs and expenses incurred by them in forwarding materials to their customers. The Purchaser will

pay all stock transfer taxes applicable to its purchase of Shares pursuant to the Offer, subject to Instruction 7 of the Letter of Transmittal.

In order to accept the Offer, a duly executed and properly completed Letter of Transmittal and any required signature guarantees, or an Agent’s Message (as defined in the Offer to Purchase) in connection with a book-entry delivery of Shares, and any other required documents, must be received by the Depositary by midnight, New York City time, on February 14, 2007.

Any inquiries you may have with respect to the Offer should be addressed to, and additional copies of the enclosed materials may be obtained from, the Information Agent at the address and telephone number set forth on the back cover of the Offer to Purchase.

Very truly yours,

CGEA Investor, Inc.

NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE YOU AS THE AGENT OF THE PURCHASER, THE INFORMATION AGENT OR THE DEPOSITARY, OR AUTHORIZE YOUR OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.

2

EX-99.(A)(1)(E)

Exhibit (a)(1)(E)

OFFER TO PURCHASE FOR CASH

All Outstanding Shares of Common Stock

(including the Associated Series A Participating Preferred Stock Purchase Rights)

of

ElkCorp

at

$40.50 Net Per Share in Cash

by

CGEA Investor, Inc.

a wholly owned subsidiary of

CGEA Holdings, Inc.

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE AT MIDNIGHT, NEW YORK CITY TIME, ON FEBRUARY 14, 2007, UNLESS THE OFFER IS EXTENDED.

To Our Clients:

Enclosed for your consideration are the Offer to Purchase, dated January 18, 2007 (the “Offer to Purchase”), and the related Letter of Transmittal (which together, as amended, supplemented or otherwise modified from time to time constitute the “Offer”) in connection with the offer by CGEA Investor, Inc. (“Purchaser”), a Delaware corporation and wholly owned subsidiary of CGEA Holdings, Inc. (“Parent”), to purchase all the outstanding shares of common stock, par value $1.00 per share (the “Shares”), of ElkCorp, a Delaware corporation (the “Company”), and the associated Series A Participating Preferred Stock purchase rights (the “Rights”) at a price of $40.50 per share net to the seller in cash (subject to applicable withholding taxes), without interest thereon.

The purpose of the Offer and the associated second step merger is for Parent, through Purchaser, to acquire control of, and the entire equity interest in, the Company. Purchaser has commenced the Offer as the first step in its plan to acquire all the outstanding Shares, pursuant to which, after completion of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into the Company and the Company will be the surviving corporation (the “Merger”). Pursuant to the Merger, Parent will acquire all of the Shares not purchased pursuant to the Offer. Stockholders of the Company who sell their Shares in the Offer will cease to have any equity interest in the Company or any right to participate in its earnings and future growth. If the Merger is consummated, non-tendering stockholders also will thereafter have no further equity interest in the Company. If Purchaser purchases a majority of the Shares pursuant to the Offer, Parent will then be entitled to designate a pro rata amount of the directors of the Company’s board of directors subject to certain conditions.

We are the holder of record of Shares for your account. A tender of such Shares can be made only by us as the holder of record and pursuant to your instructions. The Letter of Transmittal is furnished to you for your information only and cannot be used by you to tender Shares held by us for your account.

We request instructions as to whether you wish us to tender any or all of the Shares held by us for your account, upon the terms and subject to the conditions set forth in the Offer to Purchase and the Letter of Transmittal.

Your attention is invited to the following:

1. The offer price is $40.50 per share, net to you in cash.

2. The Offer is being made for all outstanding Shares.

3. The Offer and withdrawal rights expire at midnight, New York City time, on February 14, 2007, unless the Offer is extended.

4. The Offer is conditioned upon a number of conditions as set forth in the Offer to Purchase and the Letter of Transmittal.

5. Tendering stockholders will not be obligated to pay brokerage fees or commissions or, subject to Instruction 7 of the Letter of Transmittal, stock transfer taxes on the transfer and sale of Shares pursuant to the Offer.

If you wish to have us tender any or all of your Shares, please so instruct us by completing, executing and returning to us the instruction form on the reverse side of this letter hereof. An envelope to return your instructions to us is enclosed. If you authorize tender of your Shares, all such Shares will be tendered unless otherwise specified on the reverse side of this letter hereof. Your instructions should be forwarded to us in ample time to permit us to submit a tender on your behalf by the expiration of the Offer.

The Purchaser is not aware of any state in which the making of the Offer is prohibited by administrative or judicial action pursuant to any valid statute. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of Shares in any jurisdiction in which the making of the Offer or acceptance thereof would not be in compliance with the laws of such jurisdiction.

2

EX-99.(A)(1)(F)

Exhibit (a)(1)(F)

OFFER TO PURCHASE FOR CASH

All Outstanding Shares of Common Stock

(including the Associated Series A Participating Preferred Stock Purchase Rights)

of

ElkCorp

at

$40.50 Net Per Share in Cash

by

CGEA Investor, Inc.

a wholly owned subsidiary of

CGEA Holdings, Inc.

January 18, 2007

To the Participants (including beneficiaries and alternate payees) in the ElkCorp Employee Stock Ownership Plan (“ESOP”):

Important:  Action on your part is required if you desire to tender your shares of ElkCorp common stock held on your behalf under the ESOP. Please read this letter and the accompanying information and complete the accompanying Trustee Direction Form and return it to Principal Trust Company in the envelope provided or by one of the other methods specified in the Trustee Direction Form.

CGEA Investor, Inc. (“Purchaser”), a Delaware corporation and wholly owned subsidiary of CGEA Holdings, Inc. (“Parent”), is offering to purchase all of the outstanding shares of common stock, par value $1.00 per share (the “Shares”), of ElkCorp, a Delaware corporation (the “Company”), and the associated Series A Participating Preferred Stock purchase rights (the “Rights”) at a price of $40.50 per share net to the seller in cash (subject to applicable withholding taxes), without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated January 18, 2007 (the “Offer to Purchase”) and the related Letter of Transmittal (which together, as amended, supplemented or otherwise modified from time to time constitute the “Offer”). Parent and Purchaser were formed by Carlyle Partners IV, L.P., an investment fund affiliated with The Carlyle Group, Inc., a global private equity firm, solely for purposes of entering into the transactions with the Company described in the Offer to Purchase.

As a participant in “ESOP”, you are eligible to tender your Shares in the tender offer. A copy of the Offer to Purchase, the Letter of Transmittal, Trustee Direction Form, and other related materials are enclosed, and you will receive or have received a copy of the Company’s Solicitation/Recommendation Statement on Schedule 14D-9 (the “Schedule 14D-9”).

The purpose of the Offer and, if the Offer is completed, the second step merger is for Parent, through Purchaser, to acquire the entire equity interest in, the Company. Purchaser has commenced the Offer as the first step in its plan to acquire all the outstanding Shares, pursuant to which, after completion of the Offer and the satisfaction or waiver of certain conditions, the Purchaser will be merged with and into the Company and the Company will be the surviving corporation (the “Merger”). In the Merger, all remaining outstanding Shares will be cancelled and converted into the right to receive the same per Share consideration paid in the Offer. Stockholders of the Company who tender their Shares in the Offer and whose Shares are accepted for payment will cease to have any equity interest in the Company or any right to participate in its earnings and future growth. Upon completion of the Merger, non-tendering stockholders also will no longer have an equity interest in the Company. After Purchaser purchases a majority of the Shares pursuant to the Offer, Parent will be entitled to designate a proportionate number of the Company’s directors.

To assist with Offer, Purchaser has engaged Innisfree M&A Incorporated to serve as the Information Agent. Representatives from the Information Agent may contact you by phone to make sure you have received the Offer to Purchase, the

Company’s Schedule 14D-9 and related materials and to answer any questions you may have. If you need additional forms, please call the Information Agent, toll-free at (888) 750-5834, or collect at (212) 750-5833 with any questions you may have.

All Shares tendered and not accepted for payment in the Offer will be returned at the Purchaser’s expense as soon as practicable following the expiration date.

If Purchaser extends the period during which the Offer is open, Purchaser will give oral or written notice of the extension to the Depositary (as defined in the Offer to Purchase) and by making a public announcement of the extension. During any extension, all Shares previously tendered and not withdrawn will remain subject to the Offer and subject to the right of a tendering stockholder to withdraw Shares, as described in Section 4 of the Offer to Purchase and in item 2 below. Purchaser’s ability and obligation to extend the Offer is described in the Offer to Purchase.

A TENDER OF YOUR SHARES CAN BE MADE ONLY BY THE TRUSTEE AS THE HOLDER OF RECORD AND PURSUANT TO YOUR INSTRUCTIONS. THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR YOUR INFORMATION ONLY AND CANNOT BE USED BY YOU TO TENDER YOUR SHARES HELD BY THE TRUSTEE FOR YOUR ACCOUNT. IF YOU DO NOT DIRECT THE TRUSTEE PRIOR TO THE DEADLINE SET FORTH IN ITEM 2 BELOW, THE SHARES HELD IN YOUR ESOP ACCOUNT WILL NOT BE TENDERED BY THE TRUSTEE.

Accordingly, please use the attached “Trustee Direction Form” to instruct Principal Trust Company, the Trustee, as to whether you wish the Trustee to tender any or all of the Shares the Trustee holds for your ESOP account upon the terms and subject to the conditions described in the Offer to Purchase and the related Letter of Transmittal.  However, if you hold Shares outside of the ESOP and wish to tender those Shares as well, then you need to complete the Letter of Transmittal according to its instructions. In either case, the Purchaser urges you to read the Offer to Purchase and Letter of Transmittal carefully before making any decision regarding the tender offer.

If you direct the ESOP trustee to tender Shares in your ESOP account into the Offer, and the Shares are accepted for purchase, the tender proceeds will be reinvested in your ESOP account in accordance with the terms of the ESOP, and no cash proceeds will be distributed to you as a result of the tender or the completion of the Offer.

If you have any questions concerning the Offer or the tender of Shares held in your ESOP account, you can call the Information Agent, toll-free at (888) 750-5834, or collect at (212) 750-5833.

The Purchaser Calls Your Attention to the Following:

When considering whether or not to accept the offer, it is important that you note the following:

1. The Offer is conditioned upon a number of conditions as set forth in the Offer to Purchase and the Letter of Transmittal.

2. THE OFFER EXPIRES AT MIDNIGHT, NEW YORK CITY TIME, ON FEBRUARY 14, 2007, UNLESS THE OFFER IS EXTENDED (the “Expiration Date”). Shares tendered under the Offer may be withdrawn at any time on or before the Expiration Date and, unless theretofore accepted for payment as provided herein, may also be withdrawn at any time after March 18, 2007 (or such later date as may apply if the Offer is extended). We have been advised that the ESOP trustee must receive your Trustee Direction Form (including any notice of withdrawal of a previously delivered instruction to tender) no later than Noon, New York City time, on the business day before the Expiration Date. Consequently, your Trustee Direction Form (or notice of withdrawal thereof) must be received by the ESOP trustee no later than Noon, New York City time, on February 13, 2007.

3. Tendering participants will not be obligated to pay any brokerage commissions or fees, solicitation fees, or stock transfer taxes on the purchase of Shares under the tender offer, except as set forth in the Offer to Purchase and the Letter of Transmittal.

4. According to the Company’s public filing, the board of directors of the Company has recommended that stockholders tender their Shares. However, none of the ESOP trustee, the Purchaser, Parent or the Information Agent is making any recommendation as to whether you should instruct the ESOP trustee to tender Shares held in your ESOP account. Stockholders must make their own decision as to whether to tender their Shares and, if so, how many Shares to tender. In doing so, stockholders should read carefully the information in the Offer to Purchase and in the related Letter of

2

Transmittal, including our reasons for making the Offer as well as the Schedule 14D-9. See the Introduction and Section 11 of the Offer to Purchase. Stockholders should discuss whether to tender their shares with their financial or tax advisors.

5. If you wish to have the Trustee tender any or all of your Shares in the Offer, please so instruct the Trustee by completing and executing the attached Trustee Direction Form and returning it to the Trustee in accordance with the attached Trustee Direction Form. If you authorize the Trustee to tender your shares in the Offer, Principal Trust Company will tender all such Shares unless you specify otherwise on the attached Trustee Direction Form. In order to tender your Shares held in your ESOP account in the Offer, you must return the Trustee Direction Form to the Trustee by Noon, New York City time, on February 13, 2007, the business day before the expiration of the Offer, in order for the trustee to have sufficient time to process your direction and tender your Shares.

6. Consistent with federal law, Shares will be tendered by the Trustee on your behalf in accordance with your directions unless it is determined that to do so would violate the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). See Section 3 of the Offer to Purchase.

7. Your delivery of a Trustee Direction Form will automatically revoke any prior direction, including any direction you previously made to tender Shares held in your ESOP account in connection with any tender offer made by another bidder.

8. If you fail to complete, sign, or timely transmit the Trustee Direction Form to the Trustee, you will be deemed to have instructed the Trustee NOT to tender any Shares held for your benefit under the ESOP into the Offer.

9. The Offer is being made solely under the Offer to Purchase and the related Letter of Transmittal and is being made to all record holders of shares. The Offer is not being made to, nor will tenders be accepted from or on behalf of, holders of shares residing in any jurisdiction in which the making of the tender offer or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.

In order to tender your Shares held for your benefit under the ESOP in the offer, you must return a Trustee Direction Form to the Trustee by Noon, New York City time on February 13, 2007, the business day before the expiration of the Offer, in order for the trustee to have sufficient time to process your direction and tender your shares. The Offer will expire at midnight, New York City time, on February 14, 2007, unless otherwise extended.

Very truly yours,

CGEA INVESTOR, INC.

3

EX-99.(A)(1)(G)

Exhibit (a)(1)(G)

CGEA Investor, Inc.
a wholly owned subsidiary of
CGEA Holdings, Inc.
TRUSTEE DIRECTION FORM
For Tender of
All Outstanding Shares of the Common Stock of
ElkCorp
At a Purchase Price of $40.50 per Share in Cash
To: Principal Trust Company,
Trustee of the ElkCorp Employee Stock Ownership Plan

The undersigned acknowledges receipt of the accompanying Letter to the Participants in the ElkCorp Employee Stock Ownership Plan (the “ESOP”), the enclosed Offer to Purchase, dated January 18, 2007 (the “Offer to Purchase”), and the Letter of Transmittal in connection with the offer by CGEA Investor, Inc. (“Purchaser”), a Delaware corporation and wholly owned subsidiary of CGEA Holdings, Inc. (“Parent”), to purchase all the outstanding shares of common stock, par value $1.00 per share (the “Shares”), of ElkCorp, a Delaware corporation (the “Company”), and the associated Series A Participating Preferred Stock purchase rights at a price of $40.50 per share net to the seller in cash (together with the Offer to Purchase, the “Offer”). Parent and Purchaser were formed by Carlyle Partners IV, L.P., an investment fund affiliated with The Carlyle Group, Inc., a global private equity firm, solely for purposes of entering into the transactions with the Company described in the Offer to Purchase.

Furthermore, the undersigned has read and understands the Letter to the Participants in the ESOP, the Offer to Purchase, the Letter of Transmittal and the Company’s Solicitation/Recommendation Statement on Schedule 14d-9 (the “Schedule 14d-9”) and hereby agrees to be bound by the terms and conditions of the Offer.

These instructions will direct Principal Trust Company, as Trustee for the ESOP (the “Trustee”), to tender Shares held by the Trustee for the undersigned’s ESOP account upon the terms and subject to the conditions set forth in the Offer to Purchase. Consistent with federal law, the trustee will tender Shares as you direct in these instructions unless it is determined that to do so would violate the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

If you fail to complete and return a Trustee Direction Form in accordance with the instructions below, Shares allocated to your account will not be tendered, and you will not participate in the tender offer.

NUMBER OF SHARES TENDERED

(CHECK ONE BOX)

o  I direct the Trustee to tender ALL of the Shares in my ESOP account.

o  I direct the Trustee to tender           Shares in my ESOP account.

o  I direct the Trustee to tender NONE of the Shares in my ESOP account.

In order to tender the Shares held in the undersigned’s ESOP account in the Offer, the undersigned must return this Trustee Direction Form to the Trustee by noon, New York City time, on February 13, 2007, the business day before the expiration of the Offer on February 14, 2007 in order for the Trustee to have sufficient time to process the undersigned’s direction and tender the undersigned’s Shares. The Offer will expire at midnight, New York City time, on February 14, 2007, unless extended.

The method of delivery of this document is at the election and risk of the ESOP participant. There are several methods of delivering your Trustee Direction Form:

1. You may mail this Trustee Direction Form the envelope provided to:

Principal Trust Company

P. O. Box 8704

Wilmington, DE 19899-9908

2. You may fax this Trustee Direction Form to Principal Trust Company at:

1-302-993-8005

3. You may also deliver this Trustee Direction Form to:

Principal Trust Company

1013 Centre Road

Wilmington, DE 19805

In all cases, sufficient time should be allowed to ensure timely delivery on or before noon, New York City time, on February 13, 2007, as explained in the accompanying Letter to the Participants in the ESOP.

According to the Company’s public filing, the board of directors of the Company has voted to recommend that the stockholders of the Company tender their Shares in the Offer. However, none of the ESOP trustee, the Purchaser, the Parent or the Information Agent is making any recommendation as to whether you should instruct the ESOP trustee to tender Shares held in your ESOP account. Stockholders must make their own decision as to whether to tender their Shares and, if so, how many Shares to tender. In doing so, stockholders should read carefully the information in the Offer to Purchase, the related Letter of Transmittal and the Schedule 14d-9, including the Purchaser’s reasons for making the Offer. See the Introduction and Section 11 of the Offer to Purchase. Stockholders should discuss whether to tender their Shares with their financial or tax advisors.

Signature(s)s: _ _

Name(s) of Record Holder(s): _ _

(Please Type or Print)

Social Security or Taxpayer ID Number: _ _

Address: 

(Street) (City) (State) (Zip Code)

Daytime Area Code and Telephone No.: _ _

Date: _ _

An executor, administrator, guardian, attorney-in-fact, or any other representative who signs on behalf of a participant, alternate payee or beneficiary must also submit to the Trustee documentary evidence in a satisfactory form in support of such authority.

EX-99.(A)(1)(H)

Exhibit (a)(1)(H)

GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION

NUMBER ON SUBSTITUTE FORM W-9

GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE PAYER. — Social Security Numbers have nine digits separated by two hyphens: i.e., 000-00-0000. Employer Identification Numbers have nine digits separated by only one hyphen: i.e., 00-0000000. The table below will help determine the number to give the payer.

		Give the SOCIAL
		SECURITY Number
For this type of account:		of:
1.	An individual’s account	The individual
2.	Two or more individuals (joint account)	The actual owner of the account or, if combined funds, any one of the individuals(1)
3.	Husband and wife (joint account)	The actual owner of the account or, if joint funds, either person(1)
4.	Custodian account of a minor (Uniform Gift to Minors Act)	The minor(2)
5.	Adult and minor (joint account)	The adult or, if the minor is the only contributor, the minor(1)
6.	Account in the name of guardian or committee for a designated ward, minor, or incompetent person	The ward, minor, or incompetent person(3)
7.	a. The usual revocable savings trust account (grantor is also trustee)	The grantor-trustee(1)
	b. So-called trust account that is not a legal or valid trust under State law	The actual owner(1)
8.	Sole proprietorship account	The Owner(4)

		Give the EMPLOYER
		IDENTIFICATION Number
For this type of account:		of:
9.	A valid trust, estate or pension trust	The legal entity (Do not furnish the identifying number of the personal representative or trustee unless the legal entity itself is not designated in the account title)(5)
10.	Corporate account	The corporation
11.	Religious, charitable, or educational organization account	The organization
12.	Partnership account held in the name of the business	The partnership
13.	Association, club, or other tax-exempt organization	The organization
14.	A broker or registered nominee	The broker or nominee
15.	Account with the Department of Agriculture in the name of a public entity (such as a State or local government, school district, or prison) that receives agricultural program payments	The public entity

(1)	List first and circle the name of the person whose number you furnish.
(2)	Circle the minor’s name and furnish the minor’s social security number.
(3)	Circle the ward’s, minor’s or incompetent person’s name and furnish such person’s social security number.
(4)	You must show your individual name, but you may also enter your business or “doing business” name. You may use either your Social Security Number or Employer Identification Number.
(5)	List first and circle the name of the legal trust, estate, or pension trust.

NOTE:   If no name is circled when there is more than one name, the number will be considered to be that of the first name listed.

6

OBTAINING A NUMBER

If you do not have a taxpayer identification number or if you do not know your number, obtain Form SS-5, Application for Social Security Number Card, or Form SS-4, Application for Employer Identification Number, at the local office of the Social Security Administration or the Internal Revenue Service (the “IRS”) and apply for a number.

Payees generally exempt from backup withholding on payments by brokers include the following:

•  A corporation.

•  A financial institution.

•  An organization exempt from a tax under Section 501(a) or an individual retirement plan or a custodial account under Section 403(b)(7) if the account satisfies the requirements of Section 401(F)(2).

•  The United States or any agency or instrumentality thereof.

•  A State, the District of Columbia, a possession of the United States or any subdivision or instrumentality thereof.

•  A foreign government, a political subdivision of a foreign government or any agency or instrumentality thereof.

•  An international organization or any agency or instrumentality thereof.

•  A registered dealer in securities or commodities registered in the U.S. or a possession of the U.S.

•  A real estate investment trust.

•  A common trust fund operated by a bank under Section 584(a).

•  An entity registered at all times under the Investment Company Act of 1940.

•  A foreign central bank of issue.

•  A futures commission merchant registered with the Commodity Futures Trading Commission.

•  A person registered under the Investment Advisors Act of 1940 who regularly acts as a broker.

Payments of dividends and patronage dividends not generally subject to backup withholding include the following:

•  Payments to nonresident aliens subject to withholding under Section 1441.

•  Payments to partnerships not engaged in a trade or business in the U.S. and which have at least one nonresident partner.

•  Payments of patronage dividends where the amount received is not paid in money.

•  Payments made by certain foreign organizations.

•  Payments made to a nominee.

Payments of interest not generally subject to backup withholding include the following:

•  Payments of interest on obligations issued by individuals. Note: You may be subject to backup withholding if this interest is $600 or more and is paid in the course of the payer’s trade or business and you have not provided your correct taxpayer identification number to the payer.

•  Payments of tax-exempt interest (including exempt-interest dividends under Section 852).

•  Payments described in Section 6049(b)(5) to nonresident aliens.

•  Payments on tax-free covenant bonds under Section 1451.

•  Payments made by certain foreign corporations.

•  Payments made to a nominee.

Exempt payees described above should provide an IRS Form W-9 or the Substitute Form W-9 to avoid possible erroneous backup withholding. PROVIDE THIS FORM TO THE PAYER, FURNISH YOUR TAXPAYER IDENTIFICATION NUMBER, CHECK THE “EXEMPT FROM BACKUP WITHHOLDING” BOX ON THE FORM, SIGN AND DATE THE FORM AND RETURN IT TO THE PAYER.

Certain payments other than interest, dividends and patronage dividends, which are not subject to information reporting are also not subject to backup withholding. For details, see the regulations under Section 6041, 6041(A)(a), 6045, and 6050A.

PRIVACY ACT NOTICE. — Section 6109 requires most recipients of dividend, interest or other payments to give taxpayer identification numbers to payers who must report the payments to IRS. IRS uses the numbers for identification purposes. Payers must be given the numbers whether or not recipients are required to file tax returns. Beginning January 1, 1993, payers must generally withhold a portion of taxable interest, dividend and certain other payments to a payee who does not furnish a taxpayer identification number to a payer. Certain penalties may also apply.

PENALTIES

(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER. — If you fail to furnish your taxpayer identification number to a payer, you are subject to a penalty of $50 for each such failure unless your failure is due to reasonable cause and not to willful neglect.

(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. — If you make a false statement with no reasonable basis which results in no imposition of backup withholding, you are subject to a penalty of $500.

(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION. — Willfully falsifying certifications or affirmations may subject you to criminal penalties including fines and/or imprisonment.

FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL REVENUE SERVICE.

EX-99.(A)(1)(I)

EXHIBIT (a)(1)(I)

PRESS RELEASE

ELKCORP AGREES TO BE ACQUIRED BY THE CARLYLE GROUP

Shareholders to receive $38.00 per share in cash;
Transaction valued at approximately $1.0 billion

DALLAS, December 18, 2006 — ElkCorp (NYSE:ELK), a manufacturer of premium roofing and building products, today announced it has entered into a definitive agreement to be acquired and taken private by global private equity firm The Carlyle Group in an all-cash transaction valued at approximately $1.0 billion, including the assumption of approximately $173 million of net debt.

Under the terms of the agreement, ElkCorp shareholders will receive $38.00 in cash for each outstanding ElkCorp share. This represents a premium of approximately 51% over ElkCorp’s closing share price on November 3, 2006, the last trading day before ElkCorp announced that its Board of Directors and management were conducting a review of the Company’s strategic alternatives.

In a separate agreement, Carlyle has agreed to partner with Hood Companies, Inc. and its subsidiary Atlas Roofing Corporation, a leading manufacturer of commercial roofing products as well as residential roofing materials. Financial terms of this transaction were not disclosed. Following the closing of the Elk transaction, Carlyle expects to merge Elk and Atlas, creating a leading player in both residential and commercial roofing. However, completion of the Elk transaction is not contingent upon completion of the Hood/Atlas transaction.

Thomas D. Karol, Chairman and Chief Executive Officer of ElkCorp, said, “Following a comprehensive evaluation process, which included reviewing a number of offers from interested third parties, the board and management concluded that Carlyle’s offer was the best way to deliver maximum value to our shareholders. We are eager to work with Carlyle to grow our business and see the combination with Atlas as a tremendous opportunity to expand both companies. Looking to the future, our customers should rest assured that quality and innovation will remain the cornerstone of our company.”

Glenn Youngkin, Carlyle Managing Director and Head of the Global Industrial team, said, “ElkCorp is a premier building products company with a continued bright future. We look forward to working with Thomas Karol and his team and the Atlas team to bring the companies to their next level of growth and profitability.”

The transaction is expected to be completed by the first quarter of 2007, and is subject to shareholder approval, regulatory approvals, and customary closing conditions. It is not subject to financing. The transaction will be financed through a combination of equity and debt financing, with the debt financing committed by Bank of America Securities, LLC and Merrill Lynch & Co., Inc.

ElkCorp’s Board of Directors, which established a Special Committee to oversee the review process, approved the agreement and has recommended that ElkCorp’s shareholders vote in favor of the transaction. UBS Investment Bank is acting as financial advisor to the company. Citigroup Global Markets Inc. is financial advisor to the Special Committee. Wachtell, Lipton, Rosen & Katz is legal advisor for ElkCorp.

Merrill Lynch & Co., Inc. and Bank of America Securities, LLC are financial advisors to The Carlyle Group, and Debevoise & Plimpton LLP is legal advisor.

###

About ElkCorp

ElkCorp, through its subsidiaries, manufactures Elk brand premium roofing and building products (90% of consolidated revenue) and provides technologically advanced products and services to other industries. Its common stock is listed on the New York Stock Exchange (NYSE:ELK). www.elkcorp.com

About The Carlyle Group

The Carlyle Group is a global private equity firm with $46.9 billion under management. Carlyle invests in buyouts, venture & growth capital, real estate and leveraged finance in Asia, Europe and North America, focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, healthcare, industrial, technology & business services and telecommunications & media. Since 1987, the firm has invested $24 billion of equity in 576 transactions for a total purchase price of $101.8 billion. The Carlyle Group employs more than 740 people in 16 countries. In the aggregate, Carlyle’s portfolio companies have more than $68 billion in revenue and employ more than 200,000 people around the world. www.carlyle.com

CONTACTS:

ElkCorp
Investor Relations
Stephanie Elwood
(972) 851-0472

Sard Verbinnen & Co
Jim Barron
(212) 687-8080

The Carlyle Group
Chris Ullman
(202) 729-5399

Forward-Looking Statements

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 that involves risks and uncertainties. These statements can be identified by the fact that they do not relate strictly to historical or current facts. These statements usually are accompanied by words such as “optimistic,” “vision,” “outlook,” “believe,” “estimate,” “potential,” “forecast,” “project,” “expect,” “anticipate,” “plan,” “predict,” “could,” “should,” “may,” “likely,” or similar words that convey the uncertainty of future events or outcomes. ElkCorp undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

These statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. These factors include, but are not limited to, (1) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; (2) the outcome of any legal

proceedings that may be instituted against ElkCorp and others following announcement of the proposal or the merger agreement; (3) the inability to complete the merger due to the failure to obtain stockholder approval or the failure to satisfy other conditions to the completion of the merger, including the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976; (4) the failure to obtain the necessary debt financing arrangements set forth in commitment letters received in connection with the merger; (5) risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the merger; (6) the ability to recognize the benefits of the merger or of any combination of Elk and Atlas; (7) the amount of the costs, fees, expenses and charges related to the merger and the actual terms of certain financings that will be obtained for the merger; and (8) the impact of the substantial indebtedness incurred to finance the consummation of the merger; and other risks that are set forth in the “Risk Factors,” “Legal Proceedings” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of and elsewhere in ElkCorp’s SEC filings, including but not limited to, its Form 10-K for the fiscal year ending June 30, 2006, copies of which may be obtained by contacting ElkCorp’s investor relations department via its website www.elkcorp.com. Many of the factors that will determine the outcome of the subject matter of this press release are beyond ElkCorp’s ability to control or predict.

Important Additional Information Regarding the Merger will be filed with the SEC.

In connection with the proposed merger, ElkCorp will file a proxy statement with the Securities and Exchange Commission (the “SEC”). Investors and security holders are advised to read the proxy statement when it becomes available because it will contain important information about the merger and the parties to the merger. Investors and security holders may obtain a free copy of the proxy statement (when available) and other documents filed by ElkCorp at the SEC website at http://www.sec.gov. The proxy statement and other documents also may be obtained for free from ElkCorp by directing such request to ElkCorp, Investor Relations, 14911 Quorum Drive, Suite 600, Dallas, TX 75254-1491, telephone (972) 851-0472.

ElkCorp and its directors, executive officers and other members of its management and employees may be deemed participants in the solicitation of proxies from its stockholders in connection with the proposed merger. Information concerning the interests of ElkCorp’s participants in the solicitation, which may, in some cases, be different than those of ElkCorp stockholders generally, is set forth in ElkCorp’s proxy statements and Annual Reports on Form 10-K, previously filed with the SEC, and will be set forth in the proxy statement relating to the merger when it becomes available.

EX-99.(A)(1)(J)

Exhibit (a)(1)(J)

PRESS RELEASE

ELKCORP AMENDS MERGER AGREEMENT WITH THE CARLYLE GROUP

Carlyle to Commence $40.50 Per Share Cash Tender Offer

DALLAS, January 16, 2007 — ElkCorp (NYSE:ELK), a manufacturer of roofing and building products, today announced that ElkCorp and The Carlyle Group have amended their previously announced merger agreement. Under the terms of the revised agreement, Carlyle will commence a tender offer to acquire all of the outstanding shares of ElkCorp common stock at a price of $40.50 per share in cash. The offer will commence on or before January 18, 2007, and will expire at midnight on the 20th business day following and including the commencement date, unless extended in accordance with the terms of the merger agreement and the applicable rules and regulations of the Securities and Exchange Commission (SEC). Following completion of the tender offer in which a majority of ElkCorp’s outstanding shares are tendered, Carlyle has committed to complete a second-step merger in which all remaining shares of ElkCorp common stock will be converted into the right to receive the same price paid per share in the tender offer. Carlyle has obtained fully committed financing for the tender offer and the second-step merger.

Upon the recommendation of a special committee of ElkCorp’s Board consisting solely of independent, non-management directors, ElkCorp’s Board has approved the revised merger agreement and recommends that shareholders tender their shares into the Carlyle offer. The Board continues to recommend that shareholders reject the $40.00 per share cash tender offer from Building Materials Corporation of America (“BMCA”).

Carlyle’s tender offer of $40.50 values the Company at approximately $1.05 billion, including the assumption of approximately $173 million of net debt, and represents a

$2.50 per share increase over the $38 price per share provided in the original merger agreement announced on December 18, 2006.

The revised per share price represents a premium of approximately 61% over ElkCorp’s closing share price on November 3, 2006, the last trading day before ElkCorp announced that its Board of Directors and management were conducting a review of the company’s strategic alternatives.

“ElkCorp is pleased that Carlyle’s revised offer delivers increased value to ElkCorp’s shareholders and a quicker timetable”, said Thomas D. Karol, Chairman and Chief Executive Officer of ElkCorp.

Glenn Youngkin, Carlyle Managing Director and Head of the Global Industrial team, said, “Our increased offer demonstrates our commitment to this transaction and our confidence in the future of ElkCorp.”

The tender offer is subject to a majority of ElkCorp’s outstanding shares being tendered in the offer and other customary closing conditions. The transaction is not subject to any financing condition and Carlyle has obtained fully committed financing for both the tender offer and the second-step merger.

The transaction will be financed through a combination of equity and debt financing, with the debt financing committed by Bank of America, N.A., Merrill Lynch Capital Corporation, Inc. and General Electric Capital Corporation and certain of their affiliates. Merrill Lynch, Pierce, Fenner & Smith Inc. and Banc of America Securities LLC are financial advisors to The Carlyle Group, and Debevoise & Plimpton LLP is legal advisor. UBS Investment Bank is financial advisor to ElkCorp, and Wachtell, Lipton, Rosen & Katz is legal advisor. Citigroup Corporate and Investment Banking is financial advisor to the Special Committee.

###

About ElkCorp

ElkCorp, through its subsidiaries, manufactures Elk brand roofing and building products (90% of consolidated revenue) and provides technologically advanced products and services to other industries. Its common stock is listed on the New York Stock Exchange (NYSE:ELK). www.elkcorp.com

About The Carlyle Group

The Carlyle Group is a global private equity firm with $46.9 billion under management. Carlyle invests in buyouts, venture & growth capital, real estate and leveraged finance in Asia, Europe and North America, focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, healthcare, industrial, technology & business services and telecommunications & media. Since 1987, the firm has invested $24 billion of equity in 576 transactions for a total purchase price of $101.8 billion. The Carlyle Group employs more than 740 people in 16 countries. In the aggregate, Carlyle’s portfolio companies have more than $68 billion in revenue and employ more than 200,000 people around the world. www.carlyle.com

CONTACTS:
Investors	Media
ElkCorp	Sard Verbinnen & Co.
Stephanie Elwood	Jim Barron
(972) 851-0472	(212) 687-8080
or MacKenzie Partners Inc. Dan Burch or Bob Marese (212) 929 5405

Forward Looking Statements. Statements made in this release, our website and in our other public filings and releases, which are not historical facts contain “forward-looking” statements (as defined in the Private Securities Litigation Reform Act of 1995) that involve risks and uncertainties and are subject to change at any time. These forward-looking statements may include, but are not limited to, statements containing words such as “anticipate,” “contemplate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “may,” “target,” “look forward to” and similar expressions. Factors that could cause actual results to differ materially include, but are not limited to, the following: costs, litigation, an economic downturn or changes in the laws affecting our business in those markets in which we operate. There can be no assurance that the tender offer, merger or other any other transaction will be consummated, or if consummated, that it will increase shareholder value. The forward-looking statements involve known and unknown risks, uncertainties and other factors that are, in some cases, beyond our control. We caution investors that any forward-looking statements made by us are not guarantees of future performance or events. We disclaim any obligation to update any such factors or to

announce publicly the results of any revisions to any of the forward-looking statements to reflect future events or developments, except to the extent required by law.

Additional Information and Where to Find It. In connection with the Carlyle tender offer, ElkCorp expects to file a solicitation/recommendation statement with the Securities and Exchange Commission (the “SEC”). In connection with the proposed merger with affiliates of The Carlyle Group, ElkCorp expects to file a proxy statement with the SEC, if required by law. In connection with the tender offer by BMCA, ElkCorp has filed a solicitation/recommendation statement with the SEC. Investors and security holders are strongly advised to read these documents when they become available because they will contain important information about the tender offer and the proposed merger. Free copies of materials which will be filed by ElkCorp will be available at the SEC’s web site at www.sec.gov, or at the ElkCorp web site at www.elkcorp.com, and will also be available, without charge, by directing requests to ElkCorp, Investor Relations, 14911 Quorum Drive, Suite 600, Dallas, TX 75254-1491, telephone (972) 851-0472. ElkCorp and its directors, executive officers and other members of its management and employees may be deemed participants in the solicitation of proxies from its shareholders in connection with the proposed merger. Information concerning the interests of ElkCorp’s participants in the solicitation, which may, in some cases, be different than those of ElkCorp shareholders generally, is set forth in ElkCorp’s proxy statements and Annual Reports on Form 10-K, previously filed with the SEC, and will be set forth in a proxy statement relating to the merger, if one is required to be filed, and in the solicitation/recommendation statement when it becomes available.

EX-99.(A)(1)(K)

Exhibit (a)(1)(K)

This announcement is neither an offer to purchase nor a solicitation of an offer to sell Shares (as defined below). The Offer (as defined below) is made solely by the Offer to Purchase, dated January 18, 2007, and the related Letter of Transmittal and any amendments or supplements thereto, and is being made to all holders of Shares. Purchaser (as defined below) is not aware of any state where the making of the Offer is prohibited by any administrative or judicial action pursuant to any valid state statute. If Purchaser becomes aware of any valid state statute prohibiting the making of the Offer or the acceptance of the Shares pursuant thereto, Purchaser will make a good faith effort to comply with that state statute or seek to have such statute declared inapplicable to the Offer. If, after a good faith effort, Purchaser cannot comply with the state statute, Purchaser will not make the Offer to, nor will tenders be accepted from or on behalf of, the holders of Shares in that state. In any jurisdiction where the securities, “blue sky” or other laws require the Offer to be made by a licensed broker or dealer, the Offer will be deemed to be made on behalf of Purchaser by Merrill Lynch & Co., the Dealer Manager, or by one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.

NOTICE OF OFFER TO PURCHASE FOR CASH

All Outstanding Shares of Common Stock

(Including the Associated Preferred Stock Purchase Rights)

of

ElkCorp

at

$40.50 Net Per Share

by

CGEA Investor, Inc.

a wholly owned subsidiary of

CGEA Holdings, Inc.

CGEA Investor, Inc. (“Purchaser”), a Delaware corporation and a wholly owned subsidiary of CGEA Holdings, Inc. (“Parent”), is offering to purchase all the outstanding shares of common stock, par value $1.00 per share (the “Shares”), of ElkCorp, a Delaware corporation (the “Company”), and the associated Series A Participating Preferred Stock purchase rights (the “Rights”) at a price of $40.50 per share net to the seller in cash (subject to applicable withholding taxes), without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated January 18, 2007 (the “Offer to Purchase”) and the related Letter of Transmittal (which together, as amended, supplemented or otherwise modified from time to time constitute the “Offer”). Tendering stockholders who have Shares registered in their names and who tender directly to Mellon Investor Services LLC (the “Depositary”) will not be obligated to pay brokerage fees or commissions or, except as set forth in the Letter of Transmittal, transfer taxes on the purchase of Shares by Purchaser pursuant to the Offer. Stockholders who hold their Shares through a broker or bank should consult with such institution as to whether it charges any service fees or commissions.

THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY TIME, ON FEBRUARY 14, 2007 UNLESS THE OFFER IS EXTENDED.

The Offer is not subject to any financing condition. The Offer is subject to the conditions, among others, that (a) at the expiration of the Offer there shall have been validly tendered in the Offer and not properly withdrawn at least a majority of the total number of Shares (assuming exercise of all outstanding warrants, options, benefit plans or obligations or securities convertible or exchangeable into Shares, whether or not vested or then exercisable) at that time (the “Minimum Tender Condition”), (b) the Company shall have in all material respects performed all obligations and complied with all covenants required by the Merger Agreement (as defined below) to be performed or complied with by it prior to the expiration date of the Offer, (c) there shall occur no change, condition, event, or development that, individually or in the aggregate, has had or would reasonably be expected to have a “Company Material Adverse Effect” (as defined in the Merger Agreement), (d) no governmental entity shall have enacted, issued or entered any restraining order, injunction or similar order or legal restraint or prohibition which remains in effect that enjoins or otherwise prohibits consummation of the Offer or the Merger, (e) the Merger Agreement shall not have been terminated by the Company, Purchaser or Parent in accordance with its terms and (f) all of the representations and warranties of the Company shall be true and correct except, subject to certain exceptions as specified in the Merger Agreement, where the failure to be so true and correct would not, individually or in the aggregate, have a Company Material Adverse Effect, as defined in the Merger Agreement.

The purpose of the Offer is for Parent through the Purchaser to acquire control of, and the entire equity interest in, the Company. Following the consummation of the Offer, Purchaser intends to effect the Merger (as defined below).

The Offer is being made pursuant to the Amended and Restated Agreement and Plan of Merger (the “Merger Agreement”), dated as of January 15, 2007, among Parent, Purchaser and the Company, pursuant to which, after completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will be merged with and into the Company, with the Company as the surviving corporation (the “Merger”). On the effective date of the Merger, each outstanding Share (other than Shares owned by Parent or Purchaser or any subsidiary of Parent or the Company or held in the treasury of the Company or held by stockholders who properly exercise appraisal rights under Delaware law) will by virtue of the Merger, and without action by the holder thereof, be canceled and converted into the right to receive an amount in cash, without interest, equal to the per Share price paid pursuant to the Offer, upon surrender of the certificate formerly representing such Share, without interest thereon and less any required withholding taxes. The Merger Agreement is more fully described in the Offer to Purchase.

The Company’s board of directors, acting upon the unanimous recommendation of the special committee, unanimously (with two directors who are senior executives of the Company abstaining) recommends that the holders of Shares accept the Offer and tender their Shares pursuant to the Offer.

Subject to the limitations contained in the Merger Agreement and to the applicable rules and regulations of the Securities and Exchange Commission (the “Commission”), Purchaser reserves the right to waive the conditions of the Offer (other than the Minimum Tender Condition) and to otherwise modify or amend the terms of the Offer (other than the conditions to the Offer). Subject to the provisions of the Merger Agreement and the applicable rules and regulations of the Commission, Purchaser reserves the right to, and under certain circumstances the Company may require Purchaser to, extend the Offer, as described in Section 1 of the Offer to Purchase. Pursuant to Rule 14d-11 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and subject to the provisions of the Merger Agreement, Purchaser may, and under certain circumstances the Company may require Purchaser to, provide a subsequent offering period of between three to twenty business days upon expiration of the Offer.

Any extension of the Offer, waiver, amendment of the Offer, delay in acceptance for payment or payment or termination of the Offer will be followed, as promptly as practicable, by public announcement thereof, such announcement in the case of an extension to be issued no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled Expiration Date (as defined in Section 1 of the Offer to Purchase).

For purposes of the Offer, Purchaser will be deemed to have accepted for payment, and thereby purchased Shares validly tendered and not properly withdrawn if and when Purchaser gives oral or written notice to the Depositary of Purchaser’s acceptance for payment of such Shares pursuant to the Offer. Upon the terms and subject to the conditions of the Offer, payment for Shares accepted for payment pursuant to the Offer will be made by deposit of the purchase price therefor with the Depositary, which will act as agent for the tendering stockholders for the purpose of receiving payments from Purchaser and transmitting such payments to the tendering stockholders. Under no circumstances will interest be paid on the purchase price for Shares, regardless of any extension of the Offer or any delay in making payment for Shares.

2

In all cases, payment for Shares tendered and accepted for payment pursuant to the Offer will be made only after timely receipt by the Depositary of (a) certificates for such Shares or timely confirmation of the book-entry transfer of such Shares into the Depositary’s account at The Depository Trust Company (“DTC”) pursuant to the procedures set forth in Section 3 of the Offer to Purchase, (b) a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent’s Message (as defined in Section 3 of the Offer to Purchase) in lieu of the Letter of Transmittal), and (c) any other documents required by the Letter of Transmittal.

Shares tendered pursuant to the Offer may be withdrawn at any time prior to the Expiration Date. Thereafter, tenders are irrevocable, except that, unless Purchaser has previously accepted them for payment, Shares tendered may also be withdrawn at any time after March 18, 2007 until Purchaser accepts them for payment. For a withdrawal of Shares to be effective, a written or facsimile transmission notice of withdrawal must be timely received by the Depositary at one of its addresses set forth on the back cover of the Offer to Purchase. Any such notice of withdrawal must specify the name of the person having tendered the Shares to be withdrawn, the number of Shares to be withdrawn and the name of the record holder of the Shares to be withdrawn, if different from that of the person who tendered such Shares. The signature(s) on the notice of withdrawal must be guaranteed by an Eligible Institution (as defined in Section 3 of the Offer to Purchase), unless such Shares have been tendered for the account of any Eligible Institution. If Shares have been tendered pursuant to the procedures for book-entry transfer as set forth in Section 3 of the Offer to Purchase, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn Shares and must otherwise comply with DTC’s procedures. If certificates for Shares to be withdrawn have been delivered or otherwise identified to the Depositary, the name of the registered holder and the serial numbers shown on such certificates must also be furnished to the Depositary as aforesaid prior to the physical release of such certificates. All questions as to the form and validity (including time of receipt) of any notice of withdrawal will be determined by Purchaser, in its sole discretion, which determination shall be final and binding. No withdrawal of Shares shall be deemed to have been properly made until all defects and irregularities have been cured or waived. None of Parent, Purchaser, the Depositary, the Information Agent (listed below), the Dealer Manager or any other person will be under any duty to give notification of any defects or irregularities in any notice of withdrawal or incur any liability for failure to give such notification. Withdrawals of tenders of Shares may not be rescinded, and any Shares properly withdrawn will be deemed not to have been validly tendered for purposes of the Offer. However, withdrawn Shares may be retendered by following one of the procedures for tendering Shares described in Section 3 of the Offer to Purchase at any time prior to the Expiration Date.

The information required to be disclosed by paragraph (d)(1) of Rule 14d-6 of the General Rules and Regulations under the Exchange Act is contained in the Offer to Purchase and is incorporated herein by reference.

Participants in the ElkCorp Employee Stock Ownership Plan (“the ESOP”) who wish to withdraw their Shares must submit a new Trustee Direction Form indicating the withdrawal. However, the new Trustee Direction Form will only be effective if it is received by the Trustee (as defined in the Trustee Direction Form) of the ESOP no later than the time and date specified in the Trustee Direction Form. Upon timely receipt of the new Trustee Direction Form, the old instructions will be deemed canceled. If such participants wish to later re-tender their Shares under the ESOP, then another, new Trustee Direction Form must be received by the Trustee no later than the time and date specified in the Trustee Direction Form.

The information required to be disclosed by Rule 14d-6 of the General Rules and Regulations under the Exchange Act, is contained in the Offer to Purchase, and is incorporated herein by reference.

The Offer to Purchase and related Letter of Transmittal will be mailed to record holders of Shares whose names appear on the Company’s stockholder list and will be furnished to brokers, dealers, commercial banks, trust companies and similar persons whose names, or the names of whose nominees, appear on the stockholder list or, if applicable, who are listed as participants in a clearing agency’s security position listing for subsequent transmittal to beneficial owners of Shares.

The Offer to Purchase and the related Letter of Transmittal contain important information and both documents should be read carefully and in their entirety before any decision is made with respect to the Offer.

Questions and requests for assistance may be directed to the Information Agent at the address and telephone number set forth below. Requests for copies of the Offer to Purchase and the related Letter of Transmittal may be directed to the Information Agent or to brokers, dealers, commercial banks or trust companies. Such copies will be furnished promptly at Purchaser’s

3

expense. Purchaser will not pay any fees or commissions to any broker or dealer or any other person (other than the Information Agent and the Dealer Manager) for soliciting tenders of Shares pursuant to the Offer.

The Information Agent for the Offer is:

501 Madison Avenue, 20^th Floor

New York, New York 10022

Banks and Brokers Call Collect: (212) 750-5833

All Others Please Call Toll-Free:(888) 750-5834

The Dealer Manager for the Offer is:

Merrill Lynch & Co.

4 World Financial Center

New York, NY 10080

Telephone: (609) 818-8000

Toll-Free: (877) 653-2948

January 18, 2007

4

EX-99.(A)(1)(L)

Exhibit (a)(1)(L)

The Carlyle Group

News Release

For Immediate Release
January 18, 2007

Carlyle Commences Tender Offer to Acquire ElkCorp

New York, NY — Global private equity firm The Carlyle Group today announced that CGEA Holdings, Inc. (“Parent”), a wholly owned subsidiary of Carlyle Partners IV, L.P., is commencing, through its wholly owned subsidiary CGEA Investor, Inc. (“Purchaser”), a cash tender offer to purchase all the outstanding shares of common stock, par value $1.00 per share (the “Shares”), of ElkCorp (NYSE:ELK) (the “Company”), a Delaware corporation, and the associated Series A Participating Preferred Stock purchase rights (the “Rights”) at a price of $40.50 per share net to the seller in cash (subject to applicable withholding taxes), without interest thereon, upon the terms and subject to the conditions set forth in the Offer to Purchase dated January 18, 2007 (the “Offer to Purchase”) and the related Letter of Transmittal (which together, as amended, supplemented or otherwise modified from time to time constitute the “Offer”). The Offer is being made in connection with the Amended and Restated Agreement and Plan of Merger, dated as of January 15, 2007, among Parent, Purchaser and the Company (the “Merger Agreement”), pursuant to which, after the completion of the Offer and the satisfaction or waiver of certain conditions, Purchaser will be merged with and into the Company and the Company will be the surviving corporation (the “Merger”).

Parent and Purchaser today will file with the Securities and Exchange Commission a tender offer statement on Schedule TO setting forth in detail the terms of the Offer. The Company today will file with the Commission a solicitation/recommendation statement on Schedule 14D-9 setting forth in detail, among other things, the recommendation of the Company’s board of directors that the Company’s stockholders accept the Offer and tender their shares pursuant to the Offer to Purchase. As previously announced, the Company’s board of directors, acting upon the unanimous recommendation of the special committee, unanimously (with two directors who are senior executives of the Company abstaining) recommended that the holders of the Shares accept the Offer and tender their shares pursuant to the Offer.

The Offer will expire at 12:00 midnight on February 14, 2007, unless extended in accordance with the Merger Agreement and the applicable rules and regulations of the Securities and Exchange Commission. The offer will be subject to customary conditions, including anti-trust and other regulatory clearances.

Merrill Lynch & Co is acting as dealer-manager for the Offer. The Special Committee of the board of directors of the Company (“Special Committee”) received an opinion, dated January 14, 2007, of Citigroup Global Markets Inc. (“Citigroup”), the Special Committee’s financial advisor, to the effect that, as of the date of such opinion and based upon and subject to the factors and assumptions set forth in such opinion, the consideration to be received in the Offer and the Merger, taken together, by holders of Shares (other than Parent, Purchaser and their respective affiliates) was fair, from a financial point of view, to such holders, and the Company’s board of directors received an opinion, dated January [14], 2007, of UBS Securities LLC (“UBS”), the board of directors’ financial advisor, to the effect that, as of the date of such opinion, and based upon and subject to the factors and assumptions set forth in such opinion, the consideration to be received in the Offer and the Merger, taken together by holders of Shares (other than Parent, Purchaser and their respective affiliates) was fair, from a financial point of view, to such holders. Debevoise & Plimpton LLP is legal counsel to The Carlyle Group, and Wachtell, Lipton, Rosen & Katz is legal counsel to ElkCorp.

The description contained herein is neither an offer to purchase nor a solicitation of an offer to sell shares of the Company. Parent and Purchaser, will file with the Securities and Exchange Commission

a tender offer statement on Schedule TO, and will mail an offer to purchase, forms of letter of transmittal and related documents to the Company’s stockholders. The Company will file with the Securities and Exchange Commission, and will mail to the Company’s stockholders, a solicitation/recommendation statement on Schedule 14D-9. These documents contain important information about the Offer and stockholders of the Company are urged to read them carefully when they become available. Stockholders of the Company will be able to obtain a free copy of these documents (when they become available) at http://www.elk.com and the website maintained by the Securities and Exchange Commission at http://www.sec.gov/ or by contacting the information agent for the Offer, Innisfree M&A Incorporated at (212) 750-5833 or (888) 750-5834 (toll free).

Forward Looking Statements. This release contains some forward-looking statements as defined by the federal securities laws which are based on our current expectations and assumptions, which are subject to a number of risks and uncertainties that could cause actual results to differ materially from those anticipated, projected or implied. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

# # #

For further information:

The Carlyle Group
Chris Ullman
(202) 729-5399

ElkCorp:
Stephanie Elwood
(972) 851-0472
or
MacKenzie Partners Inc.
Dan Burch or Bob Marese
(212) 929 5405

# # #

About ElkCorp
ElkCorp, through its subsidiaries, manufactures Elk brand roofing and building products (90% of consolidated revenue) and provides technologically advanced products and services to other industries. Its common stock is listed on the New York Stock Exchange (NYSE:ELK). www.elkcorp.com

About The Carlyle Group
The Carlyle Group is a global private equity firm with $46.9 billion under management. Carlyle invests in buyouts, venture & growth capital, real estate and leveraged finance in Asia, Europe and North America, focusing on aerospace & defense, automotive & transportation, consumer & retail, energy & power, healthcare, industrial, technology & business services and telecommunications & media. Since 1987, the firm has invested $24 billion of equity in 576 transactions for a total purchase price of $101.8 billion. The Carlyle Group employs more than 740 people in 16 countries. In the aggregate, Carlyle’s portfolio companies have more than $68 billion in revenue and employ more than 200,000 people around the world. www.carlyle.com

EX-99.(A)(1)(M)

Exhibit (a)(1)(M)

EFiled: Dec 19 2006 4:43 PM EST
Transaction ID 13241654

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN AND FOR NEW CASTLE COUNTY

CALL4U, LTD.,		)
		)
	Plaintiff,	)
v.		)
		)	C.A. No.
ELKCORP, THOMAS D. KAROL,		)
RICHARD A. NOWAK, STEVEN J.		)
DEMETRIOU, JAMES E. HALL, DALE V.		)
KESLER, SHAUNA R. KING, MICHAEL L.		)
MCMAHAN, and THE CARLYLE GROUP,		)
L.P.,		)
		)
	Defendants.	)

COMPLAINT

         Plaintiff, by its attorneys, alleges on information and belief, except for its own acts, which are alleged on knowledge, as follows:

     1. Plaintiff brings this action on behalf of the public stockholders of ElkCorp (“Elk” or the “Company”) seeking injunctive and other appropriate relief with respect to a proposed going-private transaction in which defendant The Carlyle Group, L.P. (“Carlyle”) seeks to acquire the Company at a price of $38.00 per share. The process employed by the Company’s directors, the above-named individual defendants, to sell Elk fails to maximize shareholder value because, among other things, at least one bonafide bidder, Building Materials Corporation of America (“BMCA”), has been excluded from actively participating in the sales process even though BMCA is offering $40 per share.

     2.   Plaintiff is, and has been at all relevant times, the owner of shares of Elk common stock.

     3.   Elk is a corporation organized and existing under the laws of the State of Delaware; maintains its principal corporate offices at 14911 Quorum Drive, Suite 600, Dallas, Texas 75254; and is primarily a manufacturer of building products. Specifically, it manufactures architectural roofing shingles, composite wood decking and railing products, non-woven fabric products and surface finishes, including hard chrome and other finishes designed to extend the life of steel machinery components operating in abrasive environments.

     4.   Defendant Carlyle, a private partnership, is based in Washington, D.C. and has offices in 16 countries. Carlyle is a global private equity firm with $44.3 billion under management.

     5.   Defendant Thomas D. Karol has served as Chairman of the Board and Chief Executive Officer of Elk since March 31, 2002; and as President and Chief Executive Officer of the Company beginning March 26, 2001.

     6.   Defendant Richard A. Nowak has served as President and Chief Operating Officer of the Company since March 31, 2002 and as Director since 2001. From September 24, 2001 until his election as President and Chief Operating Officer, Defendant Smith served as Executive Vice President of the Company.

     7.   Defendant Steven J. Demetriou has served as a Director of Elk since 2005.

     8.   Defendant James E. Hall has served as a Director of Elk since 1974.

     9.   Defendant Dale V. Kesler has served as a Director of Elk since 1998.

     10. Defendant Shauna R. King has served as a Director of Elk since 2004.

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     11. Defendant Michael L. McMahan has served as a Director of Elk since 2001.

     12. The individual defendants, as officers and/or directors of Elk, have a fiduciary relationship with plaintiff and the other public stockholders of Elk and owe them the highest obligations of good faith, fair dealing, loyalty and due care.

     13. Carlyle has aided and abetted the individual defendants in breaching their fiduciary duties owed to plaintiff and the other public stockholders of Elk, by participating in the proposed unfair going-private transaction and taking advantage of a skewed sales process.

CLASS ACTION ALLEGATIONS

     14. Plaintiff brings this action on his own behalf and as a class action on behalf of all owners of Elk common stock and their successors in interest, except Defendants and their affiliates (the “Class”).

     15. This action is properly maintainable as a class action for the following reasons:

          (a) the class is so numerous that joinder of all members is impracticable; Elk has approximately 20,590,000 million shares of common stock outstanding owned by hundreds, if not thousands, of geographically dispersed shareholders;

          (b) there are questions of law and fact that are common to the Class, including, inter alia, the following:

(i) Have the individual defendants breached their fiduciary duties owed by them to plaintiff and the others members of the Class; and

3

(ii) Is the Class entitled to injunctive relief or damages as a result of defendants’ wrongful conduct.

          (c) Plaintiff is committed to prosecuting this action and has retained competent counsel experienced in litigation of this nature;

          (d) Plaintiff’s claims are typical of those of the other members of the Class;

          (e) Plaintiff has no interests that are adverse to the Class;

          (f) The prosecution of separate actions by individual members of the Class would create the risk of inconsistent or varying adjudications for individual members of the Class and of establishing incompatible standards of conduct for Defendants; and

          (g) Conflicting adjudications for individual members of the Class might as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests.

CLAIM FOR RELIEF

     16. On December 18, 2006, Elk announced that it had signed a definitive agreement to be acquired by Carlyle in a transaction valued at approximately $1 billion.

     17. Under the terms of the transaction, each stockholder of Elk will receive $38.00 in cash for each outstanding Elk share.

     18. The amount offered is below the Company’s intrinsic fair value and is below the price of $40 per share currently being offered by BMCA. The unfairness of the Carlyle transaction has also been confirmed by the public markets. The price for Elk shares closed at $38.79 on December 18, 2006, following the announcement of the going

4

private transaction. The following day, December 19, 2006, the price of Elk shares continued to rise, trading above $40.90 per share.

     19. The management of the Company, led by Defendant Karol as Chief Executive Officer, has partnered with Carlyle in this transaction to take the Company private at a time that the Company is experiencing continued growth.

          (a) Total revenues for the Company have continued to increase in the past two years from $761,720,000 in 2005 to $929,790,000 in 2006.

          (b) The total assets for the Company have dramatically increased over the past four years from $381,430,000 in 2002, to $442,290,000 in 2003, to $480,710,000 in 2004, to $613,570,000 in 2005 and to $681,860,000 in 2006.

          (c) The total stockholder equity for the Company has continued to grow in each of the past three years from $176,090,000 in 2002, to $196,530,000 in 2003, to $215,040,000 in 2004, to $270,810,000 in 2005 and to $322,436,000 in 2006.

          (d) The gross profit for the Company has continued to expand over the past two years from $147,790,000 in 2005 to $170,540,000 in 2006.

     20. Recognizing the strength of the Company’s business, defendant Carlyle has launched a plan to acquire Elk’s business below the market price by acting in concert with the individual defendants to exclude other bidders from participating in the sales process.

     21. BMCA, a privately held corporation and a subsidiary of GAF Corporation (“GAF”), is one of the nation’s largest roofing manufacturers with annual sales of approximately $2 billion under the GAF name.

     22. On November 6, 2006, Heyman Investment Associates Ltd. Partnership (“Heyman”), which controls BMCA, revealed that, with an eye toward merging the two rival companies, it had acquired a 10.36% stake in Elk. In a letter to Elk advising of the significant benefits of combining the two companies, BMCA noted that, “We believe that a combination of our two companies provides Elk shareholders with the opportunity to

5

realize full value for their shares because of the unique synergies that exist between our two businesses which are an excellent fit for each other.”

     23. On November 6, 2006, Elk announced that its management and Board were engaged in a review of a possible merger or sale of the Company. Defendant Karol stated that: “Several parties have indicated interest in the Company, and our management and the Board believe that it is prudent to evaluate all opportunities for maximizing shareholder value.” The Board noted at that time that it did not intend on disclosing developments regarding its review of the auction process unless and until it approves a definitive transaction.

     24. In connection with the auction process, the Company also announced that on November 5, 2006 the Board had unilaterally adopted an amendment to its Shareholder Rights Agreement, or “poison pill.” The amendment reduced the beneficial ownership threshold at which the rights will become exercisable from 15% to 10%. That is, under the amendment, should any person or group acquire beneficial ownership of 10% or more of the Company’s common stock, all rights not held by the 10% stockholder become rights to purchase Elk common stock at a 50% discount. Any stockholder that beneficially owns 10% or more of the Company’s stock as of November 5, 2006 would not be deemed to have crossed the threshold under the terms of the amendment unless or until such stockholder acquires additional shares of the Company’s common stock.

     25. This amendment effectively blocks Heyman or BMCA from making any additional investment in the Company and precludes them from making an offer directly to the Company’s stockholders to purchase the shares of the Company without Board approval.

     26. This amendment to the Company’s Shareholder Rights Agreement was never approved by Elk’s stockholders. Nor were Elk stockholders given an opportunity to review the Board’s decision to effectively tie Heyman’s and BMCA’s hands with respect to the sale of the Company.

6

     27. Moreover, it was only in early November 2006 that the Board first advised BMCA that its sale process had been underway for sometime and was expected to conclude by the end of November. BMCA was never invited into the sale process at inception and was expressly excluded from the sale process despite the fact that BMCA was a logical strategic merger partner and a bona fide bidder for the Company.

     28. The Company invited BMCA to participate in the auction process but only if BMCA entered into an onerous standstill agreement preventing BMCA from making a tender offer directly to Elk stockholders. Additionally, under the terms of the agreement, the Company would be permitted to terminate the process and discussions with BMCA for any reason at any time, while BMCA would be prevented, for a period of two years, from submitting an offer directly to Elk stockholders.

     29. Notwithstanding these onerous requirements, on November 16, 2006, BMCA made an offer to enter into a merger agreement with Elk for $35.00 per share in cash. Such merger was not conditioned upon financing but was subject to Hart-Scott-Rodino approval, the rescission of Elk’s poison pill, and other customary conditions.

     30. Moreover, BMCA stated that because it was excluded from the auction process, its offer was based upon publicly available information; however, should Elk decide to share confidential information with BMCA as it did with Carlyle, it would consider increasing its offer price.

     31. Rather than engaging in discussions with BMCA, Elk’s management redoubled their efforts to sell the Company in a management-led buyout to Carlyle.

     32. On December 18, 2006, the Company announced that it had entered in a definitive merger agreement with Carlyle for $38 per share.

     33. In response, the following day, on December 19, 2006, BMCA increased its offer to $40 per share.

7

     34. In a letter to the Company dated December 19, 2006, BMCA stated:

     This is to advise you that BMCA is raising its tender offer price from $35 to $40 per share cash consideration for all Elk shares.

     We were surprised and disappointed by your announcement today that you have agreed to a leveraged buyout for Elk involving management participation, as this was done without once contacting us regarding our proposal to buy Elk or providing an opportunity for BMCA to bid. As you know, BMCA advised Elk more than four weeks ago, on November 15th, that BMCA was in a position to consider increasing its $35 per share price. Finally, instead of encouraging BMCA to maximize the value of its offer, to add insult to injury, your advisors attempted, in a 3:49 AM email on Monday morning, to persuade us to defer making the tender offer to your shareholders that we had informed you about on Sunday night. How could these actions possibly he in the interests of Elk shareholders?

     While you have not communicated the details of your leveraged buyout, we trust that you have not agreed to anything that would prevent us from competing economically and in effect preclude a higher offer for your shareholders. Finally, our offer is obviously superior to the Elk leveraged buyout in both price and the fact that BMCA’s offer is a tender offer, not subject to regulatory clearance, and, barring any undue delay on the part of Elk, should close in January 2007.

     35. Elk’s agreement to be acquired by defendant Carlyle Group is the result of an unfair process that has prevented Elk stockholders from maximizing the value of their shares.

     36. The Individual Defendants have initiated an active sales process and, thus, have assumed enhanced duties to maximize shareholder value. By continuing to exclude BMCA from the auction process and favoring an inferior offer for the Company, the individual defendants are breaching their fiduciary duties to the public stockholders of Elk in a sale of the Company.

     37. Plaintiff and the other members of the Class will be irreparably harmed as a result of defendants’ unlawful actions. Unless defendants are enjoined by the Court, the individual defendants will continue to breach their fiduciary duties owed to plaintiff and the other members of the Class.

8

     38. Plaintiff and the other members of the Class have no adequate remedy at law.

     39. WHEREFORE, plaintiff demands judgment against defendants jointly and severally, as follows:

          (A) declaring this action to be a class action and certifying plaintiff as the Class representative and its counsel as Class counsel;

          (B) enjoining, preliminarily and permanently, the proposed buy-out;

          (C) directing the individual defendants to deploy the poison pill only in a manner most effective for maximizing shareholder value;

          (D) in the event that the transaction is consummated prior to the entry of this Court’s final judgment, rescinding it or awarding plaintiff and the Class rescissory damages;

          (E) directing that defendants account to plaintiff and the other members of the Class for all damages caused by them and account for all profits and any special benefits obtained as a result of their breaches of their fiduciary duties;

          (F) awarding plaintiff the costs of this action, including a reasonable allowance for the fees and expenses of Plaintiff’s attorneys and experts; and

          (G) granting plaintiff and the other members of the class such further relief as the Court deems just and proper.

ROSENTHAL, MONHAIT & GODDESS, P.A.
By:	/s/ Joseph A. Rosenthal
	Joseph A. Rosenthal (Del. Bar No. 234)
	Carmella P. Keener (Del. Bar No. 2810)
	919 N. Market Street, Suite 1401
	P.O. Box 1070
	Wilmington, DE 19899
	(302) 656-4433
	Attorneys for Plaintiff

9

OF COUNSEL:

Eduard Korsinsky, Esquire
ZIMMERMAN, LEVI & KORSINSKY, LLP
39 Broadway, Suite 1601
New York, New York 10006
(212) 363-7500

10

EX-99.(A)(1)(N)

Exhibit (a)(1)(N)

No. 06.06.18562 - - B

WILLIAM E. WETZEL, Derivatively on	§	IN THE COUNTY COURT
Behalf of ELKCORP,	§
	§
Plaintiff,	§	AT LAW NO. 2
	§
	§
vs.	§
	§	DALLAS COUNTY, TEXAS
THOMAS D. KAROL, RICHARD A.	§
NOWAK, DALE V. KESLER, JAMES E.	§
HALL, SHAUNA R. KING, STEVEN J.	§
DEMETRIOU, MICHAEL L. CMAHAN	§
and THE CARLYLE GROUP,	§
Defendants,	§
	§
— and —	§
	§
ELKCORP, a Delaware corporation,	§
	§
Nominal Defendant.	§

SHAREHOLDER DERIVATIVE PETITION FOR BREACH OF FIDUCIARY DUTY

     Plaintiff, by his attorneys, alleges as follows:

     Pursuant to Rule 190.4 of the Texas Rules of Civil Procedure, plaintiff would show that discovery is intended to be conducted under Level 3 of this rule due to the complexity of this case.

INTRODUCTION

     1. This is a shareholder derivative action on behalf of ElkCorp (“ElkCorp” or the “Company”) against its Board of Directors and The Carlyle Group (“Carlyle”) for breaches of fiduciary duty and other violations of state law arising out of the defendants’ efforts to sell ElkCorp at an inadequate and unfair price via a grossly unfair process designed to favor Carlyle to the detriment of the Company. The Individual Defendants have prematurely caused the Company to enter into an Agreement and Plan of Merger (“Merger Agreement”) with Carlyle pursuant to a sale process which was not designed to protect the interests of ElkCorp or its shareholders

     2. Beginning in November 2006, Heyman Investment Associates Limited Partnership, on behalf of Building Materials Corporation of America (collectively, “BMCA”), began communicating with defendant Thomas D. Karol (“Karol”), ElkCorp’s Chairman and Chief Executive Officer, regarding BMCA’s preliminary interest in exploring a business combination with the Company in a transaction favorable to ElkCorp and its shareholders. On November 6, 2006, BMCA announced its acquisition of 10.36% of the Company’s common stock in a Schedule 13D filing with the Securities and Exchange Commission (“SEC”).

     3. In furtherance of their efforts to extract personal benefits for themselves, the Individual Defendants failed to disclose BMCA’s offers to the public as well as ElkCorp’s shareholders.

     4. On November 16,2006, after defendant Karol refused to respond to BMCA’s earlier overtures regarding an offer or otherwise negotiate in good faith with BMCA for the benefit of

SHAREHOLDER DERIVATIVE PETITION — Page 1

ElkCorp and its shareholders, BMCA was forced to publicly announce its initial offer to purchase ElkCorp’s for $35.00 per share. As described in detail herein, the Individual Defendants failed to properly consider this offer to purchase ElkCorp.

     5. On December 18, 2006, after repeatedly refusing to negotiate in good faith, the Individual Defendants announced that they had caused ElkCorp to agree to be acquired by Carlyle for $38.00 per share (the “Proposed Acquisition”). Rather than acting in the best interests of ElkCorp and its shareholders, the Individual Defendants refused to negotiate in good faith with all interested suitors and instead sought out a buyer that would acquiesce to their personal demands to the detriment of ElkCorp and its shareholders. Indeed, as described in detail herein, the Individual Defendants continually failed to engage in a fair process to explore potential business alternatives for the Company. The Company has suffered harm as a result of the Individual Defendants’ actions.

     6. On December 20, 2006, BMCA announced it would raise its offer to purchase ElkCorp to $40.00 per share. However, as a result of improper contractual terms agreed to in the Merger Agreement, the Individual Defendants have precluded ElkCorp from considering this superior proposal for its assets and defendant Carlyle has knowingly aided and abetted the Individual Defendants in their ongoing breaches of fiduciary duty.

     7. In pursuing their unlawful plan to sell ElkCorp via an unlawful and unfair process, each of the defendants violated applicable law by directly breaching and/or aiding the other defendants’ breaches of their fiduciary duties of loyalty, due care, independence, good faith and fair dealing. Absent immediate judicial intervention, the defendants will continue to breach their fiduciary duties and the Company and its shareholders will be irreparably harmed. This action seeks equitable relief only.

SHAREHOLDER DERIVATIVE PETITION — Page 2

JURISDICTION AND VENUE

     8. This Court has jurisdiction over each of the defendants because they conduct business in, reside in and/or are citizens of Texas. Certain of the defendants are residents and citizens of Texas, including defendants Karol, Kesler, Hall, McMahan and Nowak. ElkCorp is incorporated under the laws of the State of Delaware and its principal place of business is located at 14911 Quorum Drive, Suite 600, Dallas, TX 75254. Moreover, many of the defendants reside in this county and the conduct at issue took place in this county. Venue is proper in this Court because defendants’ wrongful acts arose in and emanated from this county.

PARTIES

     9. Plaintiff William E. Wetzel at all times relevant hereto has been a stockholder of ElkCorp.

     10. Nominal party ElkCorp is a Delaware corporation with its principal place of business at 14911 Quorum Drive, Suite 600, Dallas, TX 75254. The Company, through its subsidiaries, primarily manufactures and sells roofing and composite building products in the United States and Canada. It manufactures and sells steep-slope and low-slope architectural shingles, as well as related accessory and ventilation products, including starter-strip products.

     11. Defendant Thomas D. Karol (“Karol”) is, and at all relevant times was, Chairman of the Board and Chief Executive Officer of ElkCorp. Karol can be served with process at 5414 Lobello Drive, Dallas, TX 75229.

     12. Defendant Richard A. Nowak (“Nowak”) is, and at all relevant times was, President, Chief Operating Officer and a director of ElkCorp. Nowak can be served with process at 310 Oak Trail Drive, Lewisville, TX 75077.

SHAREHOLDER DERIVATIVE PETITION — Page 3

     13. Defendant Dale V. Kesler (“Kesler”) is, and at all relevant times was, a director of ElkCorp. Kesler also serves as a director of Aleris International, Inc., where defendant Demetriou currently serves as Chairman of the Board and CEO. Kesler can be served with process at 6708 Dartbrook Drive, Dallas, TX 75240.

     14. Defendant James E. Hall (“Hall”) is, and at all relevant times was, a director of ElkCorp. Hall can be served with process at 6605 S State Highway 349, Midland, TX 79706.

     15. Defendant Shauna R. King (“King”) is, and at all relevant times was, a director of ElkCorp. King can be served with process at 2310 Ridge Road, North Haven, CT 06473.

     16. Defendant Steven J. Demetriou (“Demetriou”) is, and at all relevant times was, a director of ElkCorp. Demetriou also serves as Chairman of the Board and CEO of Aleris International, Inc., where defendant Kesler serves as a director. Demetriou can be served with process at 8950 Antelope Run, Novelty, OH 44072.

     17. Defendant Michael L. McMahan (“McMahan”) is, and at all relevant times was, a director of ElkCorp. McMahan can be served with process at 5 Random CV, Austin, TX 78738.

     18. The defendants named in ¶¶ 11-17 are sometimes collectively referred to herein as the “Individual Defendants.”

     19. Defendant Carlyle is a Washington, D.C.-based private global investment firm that originates, structures and acts as lead equity investor in management-led buyouts, strategic minority equity investments, equity private placements, consolidations and buildups, and growth capital financings. Carlye currently has more than $46.9 billion under management. Carlyle aided and abetted the Individual Defendants in their breaches of fiduciary duty. Carlyle can be served with process at 1001 Pennsylvania Avenue NW, Washington, DC 20004.

SHAREHOLDER DERIVATIVE PETITION — Page 4

     20. By virtue of their positions as directors and/or officers of ElkCorp, the Individual Defendants have, and at all relevant times had, the power to control and influence, and did control and influence and cause ElkCorp to engage in the practices complained of herein.

DEFENDANTS’ FIDUCIARY DUTIES

     21. The Individual Defendants, because of their positions of control and authority as directors or officers of ElkCorp, were able to and did, directly and indirectly, control the wrongful acts complained of herein. Because of their advisory, executive, managerial, and directorial positions with ElkCorp, each of the defendants had access to adverse non-public information about the financial condition, operations and future business prospects of ElkCorp.

     22. At all material times hereto, each of the defendants was the agent of each of the other defendants and of ElkCorp, and was at all times acting within the course and scope of said agency.

     23. To discharge their duties, the officers and directors of ElkCorp were required to exercise reasonable and prudent supervision over the management, policies, practices and controls of the financial affairs of ElkCorp. By virtue of such duties, the officers and directors of ElkCorp were required, among other things, to:

          (a) manage, conduct, supervise and direct the business affairs of ElkCorp in accordance with applicable laws, rules and regulations and the charter and bylaws of ElkCorp;

          (b) neither violate nor knowingly permit any officer, director or employee of ElkCorp to violate applicable laws, rules and regulations;

          (c) take reasonable steps to thwart efforts by Carlyle or the other Individual Defendants to usurp ElkCorp’s assets or corporate benefits;

SHAREHOLDER DERIVATIVE PETITION — Page 5

          (d) establish a mechanism to ensure that ElkCorp and its assets were managed prudently and responsibly and that neither the Individual Defendants nor Carlyle used their control over ElkCorp to obtain any personal benefit for themselves; and

          (e) refrain from using their status as directors and officers to the detriment of the shareholders and the Company.

CONSPIRACY, AIDING AND ABETTING, AND CONCERTED ACTION

     24. In committing the wrongful acts alleged herein, each of the defendants has pursued, or joined in the pursuit of, a common course of conduct, and acted in concert with and conspired with one another, in furtherance of their common plan or design. In addition to the wrongful conduct herein alleged as giving rise to primary liability, the defendants further aided and abetted and/or assisted each other in breach of their respective duties as herein alleged.

     25. During all relevant times hereto, the defendants, and each of them, initiated a course of conduct which was designed to and did: (i) enable the Individual Defendants to obtain substantial personal benefits; (ii) fail to disclose material information about the sales process, including defendants’ failure to negotiate in good faith with BMCA because of its unwillingness to agree to a standstill agreement; and (iii) permit Carlyle to attempt to acquire ElkCorp on unfair terms. In furtherance of this plan, conspiracy and course of conduct, defendants, and each of them, took the actions as set forth herein.

     26. Each of the defendants herein aided and abetted and rendered substantial assistance in the wrongs complained of herein. In taking such actions, as particularized herein, to substantially assist the commission of the wrongdoing complained of, each defendant acted with knowledge of the primary wrongdoing, substantially assisted the accomplishment of that wrongdoing, and was aware of his or her overall contribution to, and furtherance of, the wrongdoing. The defendants’ acts of

SHAREHOLDER DERIVATIVE PETITION — Page 6

aiding and abetting included, inter alia, the acts each of them are alleged to have committed in furtherance of the conspiracy, common enterprise and common course of conduct complained of herein.

DERIVATIVE AND DEMAND EXCUSED ALLEGATIONS

     27. Plaintiff brings this action derivatively in the right and for the benefit of ElkCorp to redress injuries suffered and to be suffered by ElkCorp as a result of the breaches of fiduciary duty and other violations of law by the defendants.

     28. Plaintiff is an owner of ElkCorp common stock and was an owner of ElkCorp common stock at all times relevant hereto. Plaintiff will adequately and fairly represent the interests of the Company and its shareholders in enforcing and prosecuting its rights. Plaintiff has retained counsel experienced in these types of actions to prosecute claims on the Company’s behalf.

     29. Any demand made by plaintiff to the ElkCorp Board to institute this action is excused. Based on all the allegations in this Petition and defendants’ actions to date, including their repeated acts of entrenchment, including refusal to protect the interests of ElkCorp and its shareholders by responding in good faith to value-maximizing alternatives for the Company, such demand would be a futile and useless act. Each of the members of the Board have directly participated in the wrongs complained of herein, which disables them from acting independently, objectively or in good faith to advance the interests of ElkCorp or respond to a demand by shareholders. The Board consists of seven directors, each of whom are defendants herein. Defendants Karol and Nowak, by virtue of their position as Chairman and CEO and President and COO of ElkCorp, respectively, maintain complete control over any decisions required to be made by the Board, including any action to be taken in response to a demand made by shareholders. The

SHAREHOLDER DERIVATIVE PETITION — Page 7

Board and senior management are not disinterested or independent as detailed herein and set forth below:

          (a) Each of the defendants served on the ElkCorp Board during the relevant period and as Board members each was charged with oversight and operation of the Company and the conduct of its business affairs. Each of the defendants has breached the fiduciary duties owed to ElkCorp and its shareholders by, among other things, failing to take reasonable steps to protect and advance the interests of the Company in furtherance of their plan to advance their own interests and/or those of senior ElkCorp management at the expense of and to the detriment of ElkCorp and its public stockholders. For example, defendants have stated that: (i) the Company’s management team, including its officers and directors have negotiated to ensure they remain in place; and (ii) the defendants are refusing to solicit additional proposals for the Company.

          (b) Rather than responding in good faith to offers to purchase ElkCorp, management and the Board acted to protect and promote their personal interests and ensure themselves ongoing control over ElkCorp and thereby ensure their continued ability to receive the benefits of their positions as senior insiders and/or directors of ElkCorp.

          (c) Even though certain defendants claim to be independent directors because they are not directly employed by the Company, none of these defendants are truly independent because they each have personal and/or professional conflicts of interest with other members of the Board. For example, defendants Kesler and Demetriou serve together as directors of another company, Aleris International, Inc. As a result of these long-standing personal and professional relationships, demand on the Board would be futile.

          (d) As more fully detailed herein, the Board participated in, approved and/or permitted the wrongs alleged herein to have occurred and participated in efforts to conceal or

SHAREHOLDER DERIVATIVE PETITION — Page 8

disguise those wrongs from ElkCorp’s shareholders or recklessly and/or negligently disregarded the wrongs complained of herein. Its members are, therefore, not disinterested parties.

     30. The defendants named herein have not exercised and cannot exercise independent or objective judgment in deciding whether to bring this action or whether to vigorously prosecute this action because each of the Board members has participated in and/or acquiesced to the misconduct alleged herein.

     31. The members of the Board have demonstrated their unwillingness to act in compliance with federal or state law or sue themselves and/or their fellow directors and allies in the top ranks of the corporation for failure to do so, as they have developed professional relationships with their fellow board members who are their friends and with whom they have entangling financial alliances, interests and dependencies, and therefore, they are not able to and will not vigorously prosecute any such action.

     32. ElkCorp’s senior insiders and directors named as defendants herein have shown their interests to be antagonistic to ElkCorp and this lawsuit as they have refused to consider in good faith options to maximize shareholder value for ElkCorp and its shareholders. The members of the Board have not and will not authorize a suit against themselves as such a suit would require these defendants to expose themselves to a huge personal liability to ElkCorp, as, due to the particular language of currently utilized directors’ and officers’ liability insurance policies (i.e., the insured vs. insured exclusion), such an action would not be an insured claim.

     33. The underlying misconduct of defendants is not a product of a valid exercise of business judgment, and can not be properly ratified by the Board.

     34. Plaintiff has not made any demand on shareholders of ElkCorp to institute this action since such demand would be a futile and useless act for the following reasons:

SHAREHOLDER DERIVATIVE PETITION — Page 9

          (a) ElkCorp is a publicly traded company with approximately 20 million shares outstanding, and thousands of shareholders;

          (b) Making demand on such a number of shareholders would be impossible for plaintiff who has no way of finding out the names, addresses or phone numbers of shareholders;

          (c) Making demand on all shareholders would force plaintiff to incur huge expenses, assuming all shareholders could be individually identified;

          (d) As alleged herein, the Individual Defendants, who collectively constitute the entire Board, have systematically breached their fiduciary duties by engaging in a course of conduct which could not have been an exercise of good faith business judgment; and

          (e) There is a substantial likelihood that the Individual Defendants will be held personally liable for their breaches of fiduciary duties, and therefore the directors are incapable of independently and disinterestedly considering a demand to commence this action.

     35. The Company’s directors’ and officers’ liability insurance coverage prohibits directors from bringing suits against each other. Thus, if the Individual Defendants caused the Company to sue its officers and directors for the liability asserted in this case, they would not be insured for that liability. They will not do this to themselves. The Company’s officers’ and directors’ liability insurance was purchased and paid for with corporate funds for the protection of the corporation. This derivative action does not trigger the “insured vs. insured” exclusion, and therefore only this derivative action can obtain a recovery from the Company’s officers’ and directors’ insurance for the benefit of the corporation.

SHAREHOLDER DERIVATIVE PETITION — Page 10

FACTUAL ALLEGATIONS

     36. ElkCorp primarily manufactures and sells roofing and composite building products in the United States and Canada. It manufactures and sells steep-slope and low-slope architectural shingles, as well as related accessory and ventilation products, including starter-strip products.

The Defendants Amend ElkCorp’s Shareholder Rights Plan on the Eve of a Bona Fide Offer by BMCA

     37. On November 6, 2006, at 7:01 a.m., the Individual Defendants caused the Company to issue a press release entitled “Elkcorp Management and Board Engaged in Review of Strategic Alternatives,” which stated:

ElkCorp announced today that its management and Board of Directors are engaged in a review of the Company’s strategic alternatives, which could include a possible merger or sale of the Company. The Company has retained UBS Investment Bank to assist in this process.

     Thomas D. Karol, Chairman and Chief Executive Officer of ElkCorp, said, “ElkCorp’s strong market position, healthy balance sheet and our plan for continued growth in all three of our platforms clearly position us as a leader in the building products industry. That said, several third parties have indicated interest in the Company, and our management and the Board believe that it is prudent to evaluate all opportunities for maximizing shareholder value.” Karol added, “We are committed to doing what we believe is best for the Company and its shareholders and have engaged financial advisors to assist us in a thoughtful and comprehensive process.”

     The Company has not set a definitive timetable for completion of its evaluation and further there can be no assurances that the evaluation process will result in any transaction. The company does not intend to disclose developments regarding its evaluation of strategic alternatives unless and until its Board of Directors approves a definitive transaction.

     In connection with the strategic review, ElkCorp’s Board of Directors has adopted an amendment to the Company’s Shareholder Rights Agreement to reduce, effective today, the beneficial ownership threshold at which the rights will become exercisable from 15% to 10%. Any shareholder that beneficially owns 10% or more of the Company’s stock as of today will not be deemed to have crossed the threshold unless or until such shareholder acquires beneficial ownership of additional Company stock.

SHAREHOLDER DERIVATIVE PETITION — Page 11

BMCA Purchases A 10.36% Stake in ElkCorp

     38. The Individual Defendants’ timing of the Amendment to the Rights Agreement was adopted in violation of the defendants’ fiduciary duties as it was designed to impair shareholder value and impede any effort by BMCA to acquire ElkCorp on terms more favorable to ElkCorp or its public shareholders. This was confirmed just one hour after the Individual Defendants issued a release when, at 8:15 a.m., BMCA filed a Schedule 13D with the SEC indicating BMCA had previously acquired a 10.36% interest in ElkCorp. The Schedule 13D stated that the purpose of BMCA’s ElkCorp purchases was “to obtain an equity position in [ElkCorp] and facilitate a possible business combination between [ElkCorp] and BMCA. After a series of communications with [ElkCorp], on November 6, 2006, BMCA submitted a letter to Thomas D. Karol, Chairman of the Board and Chief Executive Officer of [ElkCorp] indicating its interest in pursuing a business combination of with [ElkCorp].” The November 6, 2006 letter followed a November 5, 2006 in person meeting which was cancelled in favor of a teleconference during which BMCA made its willingness and ability to purchase ElkCorp well known. BMCA filed as an exhibit to its Schedule 13D a letter directed to defendant Karol:

November 6, 2006                    

Mr. Thomas D. Karol
Chairman of the Board and Chief Executive Officer
ElkCorp
14911 Quorum Drive, Suite 600
Dallas, Texas 75254-1491

Dear Tom:

     As we advised you last week and again on our Sunday conference call, we have a strong interest in pursuing a business combination with Elk at an all cash price to be negotiated. We believe that a combination of our two companies provides Elk shareholders with the opportunity to realize full value for their shares because of the unique synergies that exist between our two businesses which are an excellent fit for each other. For this same reason, the combination will provide significant benefits to Elk customers and employees.

SHAREHOLDER DERIVATIVE PETITION — Page 12

     As you know, in addition to the extremely difficult operating environment we in the roofing industry now confront — resulting from unprecedented asphalt costs, margin erosion, and excess inventories — the industry faces significant long-term challenges as well. It is now readily apparent that, in the last few years, aberrational demand from weather-related events temporarily obscured the impact of higher costs and slowing industry growth, especially in the maturing market for laminated shingles. In our view, consolidation is the only logical response to these conditions.

     We have always held Elk and its employees in the highest regard, having known each other as competitors, suppliers, and friends. In recent months, we have carefully studied this combination and believe that Elk and BMCA are uniquely complementary. The limited overlap among customers and distribution channels, as well as the geographic fit of our companies’ respective facilities, offer an opportunity to enhance the combined company’s competitive position by achieving economies of scale and improving our ability to respond to customer needs to a degree that would not be available to either company on a stand-alone basis or with any other partner.

     As a combined company, we would lead the industry as the lowest-cost roofing manufacturer in the country, able to deliver product quickly and efficiently to customers in every section of the country. Our customers would also benefit from access to the most comprehensive product offering in roofing, the industry’s oldest and most developed contractor programs, and two of the industry’s most trusted and respected brand names. Finally, bringing together our companies’ world-class employees, who have driven exceptional innovation and strong historical growth at both our companies, will ensure that the combined company competes effectively in the marketplace whatever challenges we face going forward.

     We have invested a significant amount of time and money in the evaluation of a transaction between our companies. Since our companies have known each other for many years, we are quite familiar with your business, as we know that you are with ours. With your cooperation, after conducting reasonable confirmatory due diligence, we expect to be in a position to promptly provide an appropriate offer to you and your shareholders. As discussed on our conference call, we are willing, of course, to execute a customary confidentiality agreement. In addition, you should know that as a result of our discussions with lenders, we are confident that satisfactory financing for the transaction is readily available and our offer will not be subject to a financing contingency.

     Finally, you should be aware that we and our advisers have thoroughly considered the antitrust implications of this transaction, and we are highly confident that there will not be any antitrust impediments to completion. In that regard, we are filing today a Hart-Scott-Rodino notification with the Federal Trade Commission and the Antitrust Division of the United States Department of Justice.

     We are sorry that the New York Marathon prevented our meeting in person yesterday, but we appreciated the opportunity to present our proposal by teleconference instead. I look forward to our continued discussions.

SHAREHOLDER DERIVATIVE PETITION — Page 13

Sincerely,                              

/s/ Robert B. Tafaro                              

     39. Despite the existence of a “series of communications” between ElkCorp and BMCA prior to November 6, 2006, the Individual Defendants concealed these earlier communications from ElkCorp’s shareholders and the public to the detriment of ElkCorp and consistently imposed demands upon BMCA designed to ensure that the Individual Defendants would have sufficient time to maximize their own personal interests in connection with the sale of ElkCorp, rather than those of the Company or its shareholders.

     40. On November 16, 2006, BMCA filed an amended Schedule 13D which contained a second letter to defendant Karol which stated in relevant part:

November 15, 2006                    

Mr. Thomas D. Karol
Chairman of the Board and Chief Executive Officer
ElkCorp
14911 Quorum Drive, Suite 600
Dallas, Texas 75254-1491

Dear Tom:

     It was good meeting with you, your colleagues, and advisors on Monday evening in Dallas, and I appreciate your accommodating the meeting on such short notice.

     In response to your invitation to put our best foot forward, we want you to know that BMCA is prepared, based upon publicly available information, to enter into a merger agreement with Elk providing cash consideration for all outstanding Elk common shares of $35 per share. The merger would not be conditioned upon financing but would be subject to Hart-Scott-Rodino approval, the rescission of Elk’s poison pill, and other customary conditions.

     As we have pointed out, we believe that BMCA is the highest and best merger partner for Elk given BMCA’s leading position in the industry and the unique synergies which exist between our businesses. Because of our position in the industry, we are well aware of the significant benefits of a merger between our Companies as well as the difficult current operating environment and significant long term challenges we both now confront.

SHAREHOLDER DERIVATIVE PETITION — Page 14

     Again, we are proceeding based upon publicly available information, and should Elk decide to share confidential information with BMCA, we would hope to see evidence of additional value that would enable BMCA to increase its price.

     BMCA’s proposal provides a compelling opportunity for Elk shareholders to realize significant value for their shares in an all cash transaction with no significant regulatory hurdles anticipated. It should be noted that the proposed price represents an approximate 40% premium over Elk’s closing price on November 3rd ($25.18 per share), the trading day immediately preceding BMCA’s filing of its 13D and Elk’s announcement of its sale process, and a meaningful premium over Elk’s current trading price.

     As we provided you and your colleagues and advisers with a “heads up” at our Monday night meeting and again earlier today, we are proceeding along this line only after Elk and its advisors have chosen to exclude us from the on-going sale process because of their insistence that we enter into what we regard as an onerous standstill agreement. The proposed agreement would unreasonably tie BMCA’s hands and prevent us under any circumstances from making an offer directly to shareholders.

     By way of background, in our teleconference on Sunday, November 5th, you agreed that Elk would include BMCA as part of its ongoing sale process and provide us, subject to a confidentiality agreement, with due diligence similar to that which Elk had already provided other bidders. You indicated further that the process had been underway for sometime and that you were expecting to complete it by the end of November. Parenthetically, we still do not understand why we were not invited into the sale process at inception given the fact that BMCA would have had to be considered Elk’s most logical strategic merger partner.

     Shortly after the November 5th conference, your advisors provided BMCA with confidentiality and standstill agreements, the latter containing unreasonable demands concerning our Elk ownership position and BMCA’s future course of action. By way of example, under Elk’s proposed agreement, it could terminate the process and discussions with our Company for any reason at any time while preventing us, for a period of two years, from submitting our offer directly to Elk shareholders.

     In addition, under the Elk proposal, as your advisors have acknowledged, the Company reserved the right to change the rules of the process at any time, notwithstanding the fact that this could have the effect of creating an unlevel playing field and all this while BMCA would be obligated to stand still. We had similar objections to other provisions which would operate to prevent us from submitting an offer to shareholders under other circumstances as well. Although we continued to seek throughout the past week a reasonable compromise, your advisors reiterated that your Company had little or no flexibility.

SHAREHOLDER DERIVATIVE PETITION — Page 15

     At our meeting in Dallas on Monday night, we stated that we could simply not see our way clear, as a substantial Elk shareholder, to enter into the standstill agreement that your advisors had proffered. We further went on to indicate that it was Elk’s choice as to whether BMCA would proceed as part of your process or outside the process while BMCA stated that it was its strong preference to participate in the process believing that course to be in the interests of both companies. Based upon Elk’s decision, you and your advisors have left us no alternative but to proceed in this fashion.

     We reiterate our interest in a friendly transaction and remain open to any further discussion that you and your advisors wish to pursue.

     All the best.

Sincerely,                              

/s/ Robert B. Tafaro                              

     41. The November 16, 2006 filing further confirmed that the Individual Defendants were continuing to demand that BMCA agree to a “handcuff/standstill” provision which would ensure that BMCA would either agree to the personal demands of the Individual Defendants or be precluded from making an offer superior to that of a merger partner selected by the Individual Defendants.

     42. Later the same day, the Individual Defendants issued their response to BMCA’s offer via a press release, stating in relevant part:

ElkCorp today issued the statement below in response to BMCA’s amended 13D filing and letter in which BMCA proposes to acquire ElkCorp for $35 per share in cash. As announced on November 6, ElkCorp’s Board of Directors is engaged in a review of the Company’s strategic alternatives and has retained UBS Investment Bank to assist in this process.

*       *       *      

     “The Board is firmly committed to a fair process that will yield the best result for all shareholders and the Company, and will evaluate and consider BMCA’s proposal in the context of the overall process and all other proposals received.

     “Regarding BMCA’s unwillingness to execute a customary confidentiality and standstill agreement, several parties have already signed our form agreement and are actively participating in our process, including by submitting indications of interest. We have simply requested that BMCA do likewise and participate on a fair and even basis with other interested parties. A number of the assertions in BMCA’s

SHAREHOLDER DERIVATIVE PETITION — Page 16

letter are simply incorrect. Among other things, BMCA indicated no willingness to compromise on the terms of the agreement, insisting instead on preferential treatment not justified by their offer.

     “We continue to invite BMCA’s participation in our process on a basis that enhances rather than reduces the likelihood of achieving the best possible result for our shareholders.”

     As previously disclosed, the Company has not set a definitive timetable for completion of its evaluation and further there can be no assurances that the evaluation process will result in any transaction.

     43. ElkCorp’s stock price has consistently traded above $35.00 per share since the November 16, 2006 announcement regarding BMCA’s offer.

     44. On December 17, 2006, BMCA informed defendant Karol that it was commencing its tender offer for the Company’s outstanding shares for $35 per share:

December 17, 2006                    

Mr. Thomas D. Karol
Chairman of the Board and Chief Executive Officer
ElkCorp
14911 Quorum Drive, Suite 600
Dallas, Texas 75254-1491

Dear Tom:

     We are today announcing that we will be commencing a tender offer for all outstanding Elk common shares at $35 per share. As you know, we have already received antitrust clearance and this offer is not conditional on financing.

     Tom, BMCA has been both open and direct in all its dealings with you, your colleagues, and outside advisors. Notwithstanding, Elk has refused to enter into discussions with us regarding our merger proposal or provide confidential information as it has with other bidders. Most recently, on Tuesday, December 12th, our representatives contacted your financial advisors, UBS, seeking guidance on how best to proceed. UBS informed us that BMCA’s merger proposal was scheduled to be considered at an Elk Board meeting on December 13th and that they would be in a position to provide us with guidance in a call immediately after the meeting. Instead, we have heard nothing from your advisors, and they have since “gone off the air.”

     You should know that, in light of the above, you have given us no choice but to take our offer directly to shareholders. Please be assured that we continue to stand

SHAREHOLDER DERIVATIVE PETITION — Page 17

ready to negotiate a definitive merger agreement directly with Elk, if it so chooses, and we believe this to be in the best interests of Elk, its shareholders and employees.

     All the best.

Sincerely,                              

/s/ Robert B. Tafaro                              

The Defendants Agree to Sell ElkCorp
to Defendant Carlyle

     45. On December 18, 2006, the Individual Defendants issued a press release on behalf of the Company titled, “ElkCorp Agrees to Be Acquired by the Carlyle Group,” which stated in relevant part:

ElkCorp, a manufacturer of premium roofing and building products, today announced it has entered into a definitive agreement to be acquired and taken private by global private equity firm The Carlyle Group in an all-cash transaction valued at approximately $1.0 billion, including the assumption of approximately $173 million of net debt.

     Under the terms of the agreement, ElkCorp shareholders will receive $38.00 in cash for each outstanding ElkCorp share. This represents a premium of approximately 51% over ElkCorp’s closing share price on November 3, 2006, the last trading day before ElkCorp announced that its Board of Directors and management were conducting a review of the Company’s strategic alternatives.

     In a separate agreement, Carlyle has agreed to partner with Hood Companies, Inc. and its subsidiary Atlas Roofing Corporation, a leading manufacturer of commercial roofing products as well as residential roofing materials. Financial terms of this transaction were not disclosed. Following the closing of the Elk transaction, Carlyle expects to merge Elk and Atlas, creating a leading player in both residential and commercial roofing. However, completion of the Elk transaction is not contingent upon completion of the Hood/Atlas transaction.

     Thomas D. Karol, Chairman and Chief Executive Officer of ElkCorp, said, “Following a comprehensive evaluation process, which included reviewing a number of offers from interested third parties, the board and management concluded that Carlyle’s offer was the best way to deliver maximum value to our shareholders. We are eager to work with Carlyle to grow our business and see the combination with Atlas as a tremendous opportunity to expand both companies. Looking to the future, our customers should rest assured that quality and innovation will remain the cornerstone of our company.”

SHAREHOLDER DERIVATIVE PETITION — Page 18

     Glenn Youngkin, Carlyle Managing Director and Head of the Global Industrial team, said, “ElkCorp is a premier building products company with a continued bright future. We look forward to working with Thomas Karol and his team and the Atlas team to bring the companies to their next level of growth and profitability.”

     The transaction is expected to be completed by the first quarter of 2007, and is subject to shareholder approval, regulatory approvals, and customary closing conditions. It is not subject to financing. The transaction will be financed through a combination of equity and debt financing, with the debt financing committed by Bank of America Securities, LLC and Merrill Lynch & Co., Inc.

     ElkCorp’s Board of Directors, which established a Special Committee to oversee the review process, approved the agreement and has recommended that ElkCorp’s shareholders vote in favor of the transaction. UBS Investment Bank is acting as financial advisor to the company. Citigroup Global Markets Inc. is financial advisor to the Special Committee. Wachtell, Lipton, Rosen & Katz is legal advisor for ElkCorp.

     46. While Carlyle’s offer represents an increase of approximately 8.5% over BMCA’s initial $35.00 per share offer for the Company, Carlyle’s $38.00 per share materially undervalues ElkCorp. In fact, on the day Carlyle’s offer was announced, ElkCorp’s stock price closed at $38.81.

BMCA Raises Its Offer for ElkCorp

     47. Later in the day on December 18, 2006, BMCA sent a letter to the Individual Defendants which stated:

December 18, 2006                    

Board of Directors
ElkCorp
14911 Quorum Drive, Suite 600
Dallas, Texas 75254-1491

Ladies and Gentlemen:

     This is to advise you that BMCA is raising its tender offer price from $35 to $40 per share cash consideration for all Elk shares.

     We were surprised and disappointed by your announcement today that you have agreed to a leveraged buyout for Elk involving management participation, as this was done without once contacting us regarding our proposal to buy Elk or providing an opportunity for BMCA to bid. As you know, BMCA advised Elk more

SHAREHOLDER DERIVATIVE PETITION — Page 19

than four weeks ago, on November 15th, that BMCA was in a position to consider increasing its $35 per share price. Finally, instead of encouraging BMCA to maximize the value of its offer, to add insult to injury, your advisors attempted, in a 3:49 AM email on Monday morning, to persuade us to defer making the tender offer to your shareholders that we had informed you about on Sunday night. How could these actions possibly be in the interests of Elk shareholders?

     While you have not communicated the details of your leveraged buyout, we trust that you have not agreed to anything that would prevent us from competing economically and in effect preclude a higher offer for your shareholders. Finally, our offer is obviously superior to the Elk leveraged buyout in both price and the fact that BMCA’s offer is a tender offer, not subject to regulatory clearance, and, barring any undue delay on the part of Elk, should close in January 2007.

     Please advise us how you wish to proceed.

     All the best.

Sincerely,                    

/s/ Robert B. Tafaro                    

     48. On receipt of news of this higher offer, ElkCorp’s market capitalization increased by 5%. In fact, in the two trading days following BMCA’s announced tender offer for $40.00 per share, ElkCorp has traded well-above $40.00, reaching as high as $41.40.

     49. The Individual Defendants issued a statement in response to BMCA’s offer, which is facially superior to the Carlyle offer accepted by the Individual Defendants as “adequate,” stating:

ElkCorp, a manufacturer of premium roofing and building products, today confirmed it has received notice of an unsolicited cash tender offer to purchase all of ElkCorp’s outstanding shares for $40 per share from Building Materials Corporation of America (BMCA).

     The Board of Directors, consistent with its fiduciary duties and the Company’s obligations under its existing merger agreement with The Carlyle Group, will review the offer and make a recommendation to ElkCorp’s shareholders. The Board urges ElkCorp’s shareholders not to take any action with respect to the tender offer until the Board makes its recommendation.

     50. The Individual Defendants caused ElkCorp to enter into an Agreement and Plan of Merger with Carlyle which prohibits the Company from “shopping” the Company via a fair process.

SHAREHOLDER DERIVATIVE PETITION — Page 20

Section 5.3 of the Merger Agreement specifically prohibits the Company from responding to public offers or proposals to the Board to acquire over 50% of the Company’s securities — effectively precluding BMCA’s superior offer from being considered precisely because it is public in nature. The Individual Defendants further granted Carlyle a three-day Right of First Refusal in the event that a superior offer was presented to the Board.

     51. Section 7.3 of the Merger Agreement agreed to by the Individual Defendants is a provision for the payment of a “Termination Fee” of $29 million to Carlyle in the event the Company terminates the Merger Agreement. This “termination fee” grossly exceeds the Company’s available cash of $9.34 million as reported on its Form 10-Q for the first quarter 2007.

     52. The adoption of the unlawful provisions in §5.3 and §7.3 of the Merger Agreement, combined with defendants’ refusal to negotiate in good faith in connection with the sale of ElkCorp, confirms that defendants’ actions were designed to protect and advance their own interests in breach of the Individual Defendants’ fiduciary duties owed to the Company and its public shareholders.

FIRST CAUSE OF ACTION

Claim for Breach of Fiduciary Duties

     53. Plaintiff repeats and realleges each allegation set forth herein.

     54. Plaintiff brings this cause of action derivatively on behalf of ElkCorp against all Individual Defendants.

     55. The Individual Defendants are fiduciaries of ElkCorp and are obligated to conduct the business of the Company with loyalty, candor and independence and in good faith. This cause of action is asserted based upon the defendants’ acts in violation of Delaware law, which acts constitute a breach of fiduciary duty and waste of the Company’s corporate assets.

SHAREHOLDER DERIVATIVE PETITION — Page 21

     56. The defendants have violated the fiduciary duties of care, loyalty, candor and independence owed to ElkCorp, have engaged in unlawful self-dealing, and have acted to put their personal interests and/or the interests of Carlyle ahead of the interests of ElkCorp.

     57. The Individual Defendants have violated their fiduciary duties by agreeing to the Proposed Acquisition without regard to the fairness of the Proposed Acquisition to ElkCorp. By the acts, transactions and courses of conduct alleged herein, the Individual Defendants, individually and acting as part of a common plan usurped ElkCorp’s assets for themselves. As demonstrated by the allegations above, defendants knowingly or recklessly failed to exercise the care required, and breached their duties of loyalty, good faith, candor and independence owed to ElkCorp because, among other reasons, they took steps to distort and undermine the sales process and ensure that ElkCorp’s senior insiders and Carlyle had an unfair advantage, by, among other things:

          (a) failing to solicit other potential acquirors or alternative transactions;

          (b) ignoring or not protecting against the numerous conflicts of interest resulting from the directors’ own interrelationships or connection with the Proposed Acquisition; and

          (c) failing to disclose all material information regarding ElkCorp in connection with the Proposed Acquisition.

     58. By reason of the foregoing acts, practices and course of conduct, the Individual Defendants have failed to exercise ordinary care and diligence in the exercise of their fiduciary obligations toward ElkCorp. As a result of the actions of the defendants, ElkCorp and its shareholders have been damaged.

     59. If the Proposed Acquisition is not enjoined, ElkCorp’s public shareholders will be deprived of the opportunity to meaningfully exercise their franchise or receive the substantial gains

SHAREHOLDER DERIVATIVE PETITION — Page 22

they would otherwise realize if an active auction or open bidding process with “strategic” buyers was allowed to occur.

     60. As a result of defendants’ unlawful actions, ElkCorp and its public shareholders are being harmed in that they will be precluded from receiving fair value for ElkCorp’s assets and business.

     61. In addition, defendants, in their roles as executives and/or directors of the Company, participated in the acts alleged herein and/or acted in gross disregard of the facts and/or failed to exercise due care to prevent the unlawful conduct.

     62. Each of the defendants, individually and collectively, have breached and/or aided and abetted breaches of fiduciary duties owed to ElkCorp and its shareholders.

     63. As a direct and proximate result of the defendants’ conduct, ElkCorp will suffer irreparable harm if the Proposed Acquisition proceeds.

SECOND CAUSE OF ACTION

Claim for Abuse of Control

     64. Plaintiff repeats and realleges each allegation set forth herein.

     65. Plaintiff brings this cause of action derivatively on behalf of ElkCorp against all Individual Defendants.

     66. The Individual Defendants’ conduct constituted an abuse of their ability to control and influence ElkCorp for which they are legally responsible.

     67. As a direct and proximate result thereof, ElkCorp will be irreparably harmed.

PRAYER FOR RELIEF

     WHEREFORE, plaintiff demands preliminary and permanent equitable relief in favor of the Company and against defendants as follows:

SHAREHOLDER DERIVATIVE PETITION — Page 23

     A. Declaring and decreeing that the Proposed Acquisition was entered into in breach of the fiduciary duties of defendants and is therefore unlawful and unenforceable;

     B. Declaring and decreeing that the no-shop and termination fee provisions were entered into in breach of the fiduciary duties of the Individual Defendants and are therefore unlawful and unenforceable;

     C. Enjoining defendants, their agents, counsel, employees and all persons acting in concert with them from consummating the Proposed Acquisition on the terms proposed;

     D. Directing the Individual Defendants to exercise their fiduciary duties to obtain a transaction which is in the best interests of ElkCorp and its shareholders;

     E. Rescinding, to the extent already implemented, the Proposed Acquisition or any of the terms thereof;

     F. Imposition of a constructive trust, in favor of plaintiff, on behalf of the Company, upon any benefits improperly received by defendants as a result of their wrongful conduct;

     G. Awarding plaintiff the costs and disbursements of this action, including reasonable attorneys’ and experts’ fees; and

     H. Granting such other and further equitable relief as this Court may deem just and proper.

DATED: December 26, 2006	PROVOST & UMPHREY LAW FIRM, LLP
	JOE KENDALL
	State Bar No. 11260700
	WILLIE C. BRISCOE
	State Bar No. 24001788
	/s/ Joe Kendall
	JOE KENDALL

SHAREHOLDER DERIVATIVE PETITION — Page 24

3232 McKinney Avenue, Suite 700

Dallas, TX 75204

Telephone: 214/744-3000

214/744-3015 (fax)

LERACH COUGHLIN STOIA GELLER

     RUDMAN & ROBBINS LLP

DARREN J. ROBBINS

RANDALL J. BARON

655 West Broadway, Suite 1900

San Diego, CA 92101

Telephone: 619/231-1058

619/231-7423 (fax)

Attorneys for Plaintiff

SHAREHOLDER DERIVATIVE PETITION — Page 25

EX-99.(B)(1)(A)

Exhibit (b)(1)(A)

Carlyle Partners IV, L.P.
1001 Pennsylvania Avenue, NW
Suite 220 South
Washington, DC 20004-2505

January 15, 2007

Amended and Restated Equity Commitment Letter

To:	CGEA Holdings, Inc.
	CGEA Investor, Inc.

Ladies and Gentlemen:

          Carlyle Partners IV, L.P. (the “Fund”) is pleased to offer this commitment to purchase in cash up to $461.5 million of the securities of CGEA Holdings, Inc. (“Parent”) and/or its affiliates, which has been formed for the purpose of acquiring, through CGEA Investor, Inc. (“Merger Sub”), all of the outstanding shares of common stock, par value $1.00 per share, of ElkCorp (the “Company”), pursuant to that Amended and Restated Agreement and Plan of Merger, dated on or about the date hereof (the “Merger Agreement”), by and among Parent, Merger Sub and the Company, pursuant to which Merger Sub will commence a tender offer (the “Offer”) for all of the outstanding shares of common stock, par value $1.00 per share, of the Company, all on the terms and subject to the conditions set forth in the Merger Agreement (the “Transaction”). This letter agreement amends and restates the letter dated, December 18, 2006, from the undersigned to Parent and Merger Sub and as so amended and restated shall be deemed to be the Equity Commitment Letter referred to in Section 4.5 of the Merger Agreement. Capitalized terms not otherwise defined herein have the meanings ascribed to such terms in the Merger Agreement.

          1. Commitment. This commitment letter shall become effective only upon execution and delivery of the Merger Agreement by Parent and Merger Sub. The Fund hereby commits to purchase $461.5 million of securities of Parent and/or Merger Sub in cash with an aggregate purchase price not to exceed $461.5 million (the “Commitment”) and to cause Parent to use all of such proceeds to purchase securities of Merger Sub. The proceeds from the Fund’s purchases of securities pursuant to this letter shall be used by Merger Sub and Parent to fund the payment of the Per Share Amount, Merger Consideration and Option and Stock-Based Consideration (including obligations under Sections 1A.1(e) and 2.2(a) of the Merger Agreement), to fund the Tender Facility Interest Support (as described in the Debt Commitment Letter), if necessary, and thereafter for other purposes of the Transaction (including the payment of related fees and expenses (other than payment obligations of Parent and Merger Sub under 7.3 of the Merger Agreement)) and for no other purposes.

          2. Closing Conditions; Allocation of Investment Opportunity. The Fund’s obligations to purchase securities of Parent pursuant to this letter are conditioned upon (i) the satisfaction of all conditions precedent to the obligations of Parent and Merger Sub to consummate the Transaction set forth in the Merger Agreement (without any waiver of any such condition, except waivers in which Parent and Merger Sub concur in writing) and

(ii) the substantially contemporaneous funding of the Debt Financing or any alternative debt financing (subject only to receipt of the equity committed in this commitment letter); provided that the undersigned shall not, under any circumstances, be obligated to contribute to Parent more than such Commitment. The Fund may allocate all or a portion of its investment to affiliates and its commitment hereunder will be reduced by any amounts actually invested in or contributed to Parent by such affiliates on or before the Closing Date.

          3. Enforcement / Recourse. Creditors of Parent shall have no right to enforce this letter or to cause Parent or Merger Sub to enforce this letter. Concurrently with the execution and delivery of this commitment letter, the undersigned is executing and delivering to the Company a guarantee related to Parent’s and Merger Sub’s obligations under the Merger Agreement (the “Guarantee”). The Company’s remedies against the undersigned under the Guarantee shall, and are intended to be, the sole and exclusive direct or indirect remedies available to the Company and its affiliates against the undersigned in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement, including in the event that Parent or Merger Sub breaches their obligations under the Merger Agreement, whether or not Parent and Merger Sub’s breach is caused by the undersigned’s breach of its obligations under this commitment letter and any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder, affiliate or assignee of the undersigned or any former, current or future director, officer, employee, agent, general or limited partner, manager, member, stockholder, affiliate or assignee of any of the foregoing (other than Parent or Merger Sub) in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby, including in the event Parent or Merger Sub breaches any obligations under the Merger Agreement, whether or not such breach is caused by the undersigned’s breach of its obligations under this commitment letter. Notwithstanding anything that may be expressed or implied in this commitment letter, by its acceptance hereof, Parent acknowledges and agrees for itself and its subsidiaries from time to time (including, after the Closing, the Company) that (a) notwithstanding that the Fund is a partnership, no recourse hereunder or under any documents or instruments delivered in connection herewith may be had against any officer, agent or employee of the Fund, any direct or indirect holder of any equity interests or securities of the Fund (whether such holder is a limited or general partner, member, stockholder or otherwise), any affiliate of the Fund, or any direct or indirect director, officer, employee, partner, affiliate, member, controlling person or representative of any of the foregoing (other than Parent or Merger Sub) (any such person or entity, a “Related Person”), whether by the enforcement of any judgment or assessment or by any legal or equitable proceeding or by virtue of any statute, regulation or other applicable law, and (b) no personal liability whatsoever will attach to, be imposed on or otherwise be incurred by Related Persons under this commitment letter or any documents or instruments delivered in connection herewith for any claim based on, in respect of or by reason of such obligations or by their creation.

          4. Expiration. All obligations under this letter shall expire automatically upon the earlier to occur of (a) termination of the Merger Agreement pursuant to Article 7 of the Merger Agreement and (b) the assertion by the Company or any of its affiliates in any

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litigation or other proceeding of any claim against the Guarantee executed and delivered by the Fund in connection with the Merger Agreement.

          5. No Assignment. The commitment evidenced by this letter shall not be assignable by Parent or Merger Sub without the Fund’s prior written consent, and the granting of such consent in a given instance shall be solely in the discretion of the Fund and, if granted, shall not constitute a waiver of this requirement as to any subsequent assignment provided, however, that any such assignment shall not relieve the undersigned of its obligations under this commitment letter. Any purported assignment of this commitment in contravention of this Paragraph 5 shall be void.

          6. No Third Party Beneficiary. No person or entity other than Parent or Merger Sub shall be entitled to rely upon this commitment letter. This commitment letter shall be binding upon and inure solely to the benefit of each party hereto and nothing herein, express or implied, is intended or shall confer upon any other person any rights, benefits or remedies whatsoever under or by reason of this commitment.

          The Fund hereby represents and warrants with respect to itself to Parent and Merger Sub that (a) such party has all limited partnership power and authority to execute, deliver and perform this commitment letter; (b) the execution, delivery and performance of this commitment letter by the undersigned has been duly and validly authorized and approved by all necessary limited partnership action by such party; (c) this commitment letter has been duly and validly executed and delivered by such party and constitutes a valid and legally binding obligation of such party; (d) the execution, delivery and performance of this commitment letter by such party does not and will not conflict with, violate the terms of, or result in the acceleration of an obligation under (i) any material contract, commitment or other material instrument to which such party is a party or is bound, or (ii) the certificate of limited partnership or limited partnership agreement of such party; (e) the Commitment of such party is less than the maximum amount that such party is permitted to invest in any one portfolio investment pursuant to the terms of its constituent documents; and (f) such party has uncalled capital commitments in excess of the Commitment.

          This commitment letter constitutes the sole agreement, and supersedes all prior agreements, understandings and statements, written or oral, between the undersigned or any of its affiliates and any other person with respect to the subject matter hereof. The terms of this commitment letter may not be modified or otherwise amended, or waived, except pursuant to a written agreement signed by the parties hereto.

          If the foregoing is acceptable to you, please sign and return a copy of this letter, whereupon this letter will constitute the binding obligation of the Fund to provide the aforementioned commitment to Parent and Merger Sub on the terms and conditions set forth herein. This letter and the obligations hereunder shall be governed by and construed in accordance with the laws of the State of New York. The undersigned hereby waive any right to a trial by jury in respect of any litigation directly or indirectly arising out of or relating to this letter agreement or the transactions contemplated hereby or thereby. This letter constitutes the entire agreement with respect to the subject matter hereof, and supersedes all prior agreements, understandings and statements. This letter agreement may be executed in

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counterparts, each of which, when so executed, shall be deemed to be an original and all of which taken together shall constitute one and the same agreement.

[Signature Page Follows]

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Very truly yours,
CARLYLE PARTNERS IV, L.P.
By:	TC Group IV, L.P., its general partner
	By:	TC Group IV, L.L.C., its general partner
		By:	TC Group, L.L.C., its sole member
			By:	TCG Holdings, L.L.C., its managing member
			By:	/s/ Glenn A. Youngkin
				Name:	Glenn A. Youngkin
				Title:	Managing Director

CGEA HOLDINGS, INC.
By:	/s/ Glenn A. Youngkin
	Name:	Glenn A. Youngkin
	Title:	President
CGEA INVESTOR, INC.
By:	/s/ Glenn A. Youngkin
	Name:	Glenn A. Youngkin
	Title:	President

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EX-99.(B)(1)(B)

Exhibit (b)(1)(B)

January 15, 2007

CGEA Holdings, Inc.
c/o The Carlyle Group
1001 Pennsylvania Ave., NW
Suite 220 South
Washington, DC 20004

Amended and Restated Commitment Letter

Ladies and Gentlemen:

          This Amended and Restated Commitment Letter (together with all attachments and annexes hereto, this “Commitment Letter”) amends and restates the commitment letter among the parties hereto dated December 18, 2006 with respect to the subject matter hereof and supersedes such commitment letter in all respects.

          You have advised Bank of America, N.A. (“Bank of America”), Merrill Lynch Capital Corporation (“Merrill Lynch”) and General Electric Capital Corporation (“GECC” and together with Bank of America and Merrill Lynch, the “Banks”), Banc of America Securities LLC (“BAS”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S” and together with BAS, the “Joint Lead Arrangers” and together with the Banks, the “Commitment Parties,” “we” or “us”) that CGEA Holdings, Inc., a newly formed corporation (“Parent” or “you”), controlled by The Carlyle Group (together with its affiliates, “Sponsor”) and one or more other investors reasonably acceptable to us, and CGEA Investor, Inc., a newly formed and wholly-owned subsidiary of Parent (“Buyer”), have entered into an agreement and plan of merger (in the form last shown to the Banks prior to their signature hereof, and together with the schedules and exhibits thereto, the “Merger Agreement”) with ElkCorp, a Delaware corporation (the “Acquired Business” or “Elk”), pursuant to which Buyer will acquire, directly or indirectly through the Tender Offer (as defined below) and one of the Mergers (as defined below), all of the outstanding interests in the Acquired Business (the “Acquisition”) and the shareholders of the Acquired Business will receive cash in exchange for their shares in the Acquired Business and the Acquired Business will become a wholly-owned indirect subsidiary of Parent. All references to “dollars” or “$” in this agreement and the attachments hereto (collectively, this “Commitment Letter”) are references to United States dollars.

          In order to consummate the Acquisition, Buyer will make a tender offer for all of the shares of the Acquired Business’s publicly traded common stock (the “Shares”), which offer shall be conditioned upon not less than a majority (calculated on a fully diluted basis) of such Shares and not less than a majority of the voting power of the outstanding shares of capital stock of the Acquired Business entitled to vote in the election of directors being validly tendered and not withdrawn (the “Tender Offer”). Borrower (as defined in Annex I) will, subject to the terms and conditions hereof, obtain the Tender Facility (as defined below), the proceeds of which shall be contributed by Borrower to Buyer to effect the purchase of Shares in the Tender Offer and, if a “short form” merger between Buyer and Elk (the “Short Form Merger”) is possible under applicable law, to purchase Shares in the Short Form Merger. Borrower will deposit an amount equal to the interest and commitment fees that could accrue on the Tender Facility in cash into an escrow account with an escrow agent selected by the Joint Lead Arrangers and Borrower pursuant to an escrow agreement reasonably acceptable to the Joint Lead Arrangers and Borrower or provide a guarantee, letter of credit or other credit support on terms reasonably satisfactory to the Joint Lead Arrangers from a counterparty reasonably satisfactory to the Joint Lead Arrangers, which shall be used to

pay interest payment and fee obligations under the Tender Facility through the final maturity of the Tender Facility (the “Tender Facility Interest Support”).

          Subject to the terms and conditions hereof, the Commitment Parties shall make available the Take-Out Facilities (as defined below) on the date that is (x) if the Short Form Merger occurs, the Tender Facility Refinancing Date (as defined below) and (y) if otherwise, on the date that the Bidco is merged (the “Long Form Merger” and together with the Short Form Merger, the “Mergers”) with and into Elk after the requisite Elk stockholder vote therefor (the “Long Form Merger Closing Date”), the proceeds of initial borrowing under which will be used to refinance the Tender Facility, finance the payment of consideration in the Long Form Merger, redeem the Interim Equity Financing (as defined below), effect the Refinancing and pay fees and expenses in connection with the Transactions. The “Tender Facility Refinancing Date” shall mean the date that is the earlier of (x) the achievement of a Successful Syndication (as defined in the Fee Letter) and (y) 35 days following the date of the consummation of the Short Form Merger.

          We understand that the sources of funds required to fund the Tender Offer, the consideration in the Mergers, to repay certain indebtedness of the Acquired Business and its subsidiaries (the “Refinancing”), to pay fees, commissions and expenses in connection with the Transactions (as defined below) and to provide for capital expenditures, acquisitions, investments, ongoing working capital requirements and funding for general corporate purposes of Holdings and Borrower (each, as defined in the Term Sheets) and its subsidiaries following the Transactions will include:

• a senior secured bridge loan facility of $465.0 million (the “Tender Facility”) as described in the Summary of Principal Terms and Conditions attached hereto as Annex I (the “Tender Term Sheet”).

• senior secured first lien credit facilities consisting of (i) a senior secured first lien term loan facility of $450.0 million (the “First Lien Term Loan Facility”), as described in the Summary of Principal Terms and Conditions attached hereto as Annex II (the “First Lien Term Sheet”), and (ii) a senior secured first lien revolving credit facility of $100.0 million (the “Revolving Credit Facility” and, together with the First Lien Term Loan Facility, the “First Lien Bank Facilities”), as described in the First Lien Term Sheet;

• a senior secured second lien term loan facility of $200.0 million (the “Second Lien Term Loan Facility” and together with the First Lien Bank Facilities, the “Take-Out Facilities”) as described in the Summary of Principal Terms and Conditions attached hereto as Annex IV (the “Second Lien Term Sheet” and, together with the First Lien Term Sheet, the “Take-Out Term Sheets”; the Take-Out Term Sheets and the Tender Term Sheet are collectively referred to as the “Term Sheets”); and

• direct or indirect equity investments (the “Equity Financing”) in Holdings (to be further reinvested in Borrower or one of its subsidiaries) comprising not less than 29.4% of the pro forma capitalization of Borrower after giving effect to the Transactions and consisting of (i) direct or indirect equity investments by Sponsor and one or more other investors reasonably satisfactory to us (the “Equity Investors”), which investments shall be contributed to Borrower in cash as equity or otherwise be used to finance the Transactions and (ii) if Sponsor so determines, the rollover of shares of equity of the Acquired Business by existing members of management of the Acquired Business or persons under their control (the “Rollover Equity”); provided that (a) not less than 51% of the Equity Financing shall be comprised of the investments described in clause (i) above and (b) the Equity Financing required at the time of the Tender Closing Date shall in any event comprise no less than 50% of the

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value of the Shares such that the aggregate amount outstanding under Tender Facility shall in no event exceed 50% of the value of the Shares securing the Tender Facility (it being understood that a portion of the Equity Financing to be agreed (the “Interim Equity Financing”) may be made to the Borrower or Buyer in the form of redeemable preferred stock or subordinated indebtedness, in each case on terms reasonably satisfactory to the Joint Lead Arrangers). The Banks acknowledge that the terms and conditions of the Rollover Equity in the Merger Agreement are acceptable.

          No other financing will be required for the uses described above. As used herein, the term “Transactions” means the Acquisition, the Refinancing, the borrowings under the Facilities, the Equity Financing, the Rollover Equity and the payments of fees, commissions and expenses in connection with each of the foregoing.

     Commitments.

          You have requested that the Banks commit to provide the Facilities and that the Joint Lead Arrangers agree to structure, arrange and syndicate the Facilities.

          Each Bank is pleased to advise you of its commitment to provide its Specified Percentage (as defined below) of the Tender Facility upon the terms and subject to the conditions set forth in this Commitment Letter (the “Tender Commitment”). Each Bank is pleased to advise you of its commitment to provide its Specified Percentage (as defined below) of each of the First Lien Term Loan Facility and the Revolving Credit Facility upon the terms and subject to the conditions set forth in this Commitment Letter (the “First Lien Commitment”). In addition, each Bank is pleased to advise you of its commitment to provide its Specified Percentage of the Second Lien Term Loan Facility upon the terms and subject to the conditions set forth in this Commitment Letter (the “Second Lien Commitment” and, together with the First Lien Commitment and the Tender Commitment, the “Commitments”). You agree that (x) the initial funding of the Tender Facility (the “Tender Closing Date”) and (y) the date of funding of the Take-Out Facilities (the “Take-Out Closing Date”), in each case shall not occur until the conditions to the initial funding of the Tender Facility or the Take-Out Facilities, as the case may be, set forth herein under “Conditions” and in the Tender Term Sheet or the Take-Out Term Sheets, as the case may be, and the applicable Conditions to Closing set forth in Annex IV hereto (the “Conditions Annex”) have been satisfied or waived as and to the extent set forth herein. “Specified Percentage” shall mean (x) with respect to Bank of America, 40%, (y) with respect to Merrill Lynch, 40% and (z) with respect to GECC, 20%.

     Syndication.

          It is agreed that the Joint Lead Arrangers will act as the sole and exclusive lead arrangers and bookmanagers for the Facilities, and will exclusively manage the syndication of the Facilities, and will, in such capacities, exclusively perform the duties and exercise the authority customarily associated with such roles. No Lender will receive compensation with respect to any of the Facilities outside the terms contained herein and in the letter of even date herewith addressed to you providing, among other things, for certain fees relating to the Facilities (the “Fee Letter”) in order to obtain its commitment to participate in such Facilities, in each case unless you and we so agree.

          The Banks reserve the right, prior to or after execution of the Tender Documentation (as defined in the Conditions Annex), to syndicate all or a portion of its Tender Commitment to one or more institutions reasonably acceptable to you (other than certain institutions designated in writing by you) that will become parties to the Tender Documentation (the Banks and the institutions becoming parties to the Tender Documentation, the “Tender Lenders”). The Banks also reserve the right, prior to or after execution of the First Lien Documentation (as defined in the Conditions Annex), to syndicate all or a portion of

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its First Lien Commitment to one or more institutions reasonably acceptable to you (other than certain institutions designated in writing by you) that will become parties to the First Lien Documentation (the Banks and the institutions becoming parties to the First Lien Documentation, the “First Lien Lenders”). The Banks also reserve the right, prior to or after the execution of the Second Lien Documentation (as defined in the Conditions Annex), to syndicate all or a portion of its Second Lien Commitment to one or more institutions reasonably acceptable to you (other than certain institutions designated in writing by you) that will become parties to the Second Lien Documentation (the Banks and the institutions becoming parties to the Second Lien Documentation, the “Second Lien Lenders,” and, together with the Tender Lenders and the First Lien Lenders, the “Lenders”). Notwithstanding any other provision of this Commitment Letter, no Commitment Party, except with the written consent of Parent, may be relieved and novated from its obligations hereunder in connection with any syndication or assignment until after (x) in the case of the Tender Facility, the Tender Closing Date and (y) in the case of the Take-Out Facilities, the Take-Out Closing Date, and, unless Parent agrees in writing, each of the Banks shall retain exclusive control over all rights and obligations with respect to its Commitment, including all rights with respect to consents, modification and amendments, until the (x) in the case of the Tender Facility, the Tender Closing Date and (y) in the case of the Take-Out Facilities, Take-Out Closing Date, has occurred and the extensions of credit to be made on such date as contemplated hereby have been made. The Banks acknowledge and agree that their Commitments are not conditioned upon a successful syndication and that no assignment and assumption by any assignee of any obligations of any Bank in respect of its Commitment shall relieve such Bank of its obligations hereunder with respect to the Commitments prior to the (x) in the case of the Tender Facility, the Tender Closing Date and (y) in the case of the Take-Out Facilities, the Take-Out Closing Date.

          The Joint Lead Arrangers will, in consultation with you, manage all aspects of the syndication of the Facilities, including selection of additional Lenders (reasonably acceptable to you, and, in any event, excluding certain institutions designated in writing by you), determination of when the Joint Lead Arrangers will approach potential additional Lenders, any naming rights and the final allocations of the Commitments in respect of the Facilities among the additional Lenders (in a manner reasonably acceptable to you); provided that you may appoint two additional agents or co-agents with allocation of compensation thereto to be agreed by you and the Joint Lead Arrangers as appropriate for such roles and the related commitments of such agents and co-agents, so long as BAS has “left” placement on all marketing materials relating to the Facilities. To assist the Joint Lead Arrangers in their syndication efforts, you agree that you will, and will direct your representatives and advisors to, and will use commercially reasonable efforts to direct the Acquired Business and its representatives and advisors to, (a) prepare and provide all financial and other information as we may reasonably request with respect to you, the Acquired Business, your and their respective subsidiaries and the Transactions, including but not limited to financial projections through fiscal year 2011 (such projections, the “Projections”) relating to the foregoing, (b) use commercially reasonable efforts to ensure that such syndication efforts benefit from existing lending relationships of Sponsor and the Acquired Business and its subsidiaries, (c) make available to prospective Lenders senior management of Holdings and use commercially reasonable efforts to make available (to the extent reasonable and practical) senior management of the Acquired Business and its subsidiaries, (d) host, with the Joint Lead Arrangers, one meeting with prospective Lenders under the Take-Out Facilities, (e) use commercially reasonable efforts to assist the Joint Lead Arrangers in the preparation of a confidential information memorandum and other marketing materials to be used in connection with the syndication of each of the Take-Out Facilities which are customary for syndication of such Facilities (collectively with the Term Sheets, the “Information Materials”), and (f) use commercially reasonable efforts to obtain, at your expense, public ratings of the Take-Out Facilities from Moody’s Investors Service (“Moody’s”) and Standard & Poor’s Ratings Group (“S&P”) and to participate in the process of securing such ratings, including having senior management of Holdings and using commercially reasonable efforts to make available (to the extent reasonable and practical) senior management of the Acquired Business meet with such rating agencies.

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           The Banks agree to permit entities managed by the Sponsor or funds advised by their affiliated management companies (collectively, the “Sponsor Debt Fund Affiliates”) to provide up to 5% of the aggregate principal amount of the Facilities (the “Debt Fund Commitment Amount”), provided that, on the first business day that potential Lenders may commit to the Facilities, the Sponsor Debt Fund Affiliates irrevocably commit to provide the Debt Fund Commitment Amount. On the date of any payment of any underwriting fee pursuant to the Fee Letter, the Banks agree to pay the Sponsor Debt Fund Affiliates a fee equal to 75% of any underwriting fee described in the Fee Letter in respect of the principal amount of the applicable Facility actually funded by the Sponsor Debt Fund Affiliates and that such fee shall be netted against the purchase price of the applicable Facility paid by the Sponsor Debt Fund Affiliates on the applicable settlement date.

     Information.

          You hereby represent that to the best of your knowledge, (a) all written factual information (other than the Projections and information of a general economic nature) that has been or will be made available to the Banks by you, the Acquired Business (at your request) or any of your representatives in connection with the Transactions (the “Information”), when taken as a whole, is, and in the case of Information made available after the date hereof will be, correct in all material respects and does not and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements contained therein, in light of the circumstances under which such statements are made, not materially misleading, and (b) the Projections that have been or will be made available to the Joint Lead Arrangers by you or any of your representatives in connection with the Transactions have been or, in the case of Projections made available after the date hereof, will be prepared in good faith based upon assumptions believed by you to be reasonable at the time made, it being understood that projections are, by their nature, inherently uncertain, should not be viewed as fact and actual results may vary materially from the Projections. You agree to supplement the Information and the Projections from time to time until termination of the Commitments hereunder so that the representations in the preceding sentence remain correct in all material respects. You acknowledge that, subject to the provisions set forth under the headings “Confidentiality” and “Other Services”, the Banks and the Joint Lead Arrangers may share with any of their respective affiliates, and such affiliates may share with the Banks and the Joint Lead Arrangers, any information related to the Acquired Business, or any of its subsidiaries or affiliates (including, without limitation, in each case information relating to creditworthiness) and the Transactions to the extent necessary or advisable to perform the obligations of the Banks and the Joint Lead Arrangers hereunder.

          You further agree that each document to be disseminated by the Joint Lead Arrangers on your behalf to any Lender in connection with the Facilities may be identified by you as either (i) containing non-public Information or (ii) containing solely public Information, and that any Information that is not so identified shall be treated as containing private Information. If requested, you also will assist us in preparing an additional version of the Information Materials (the “Public-Side Version”) to be used by prospective Lenders’ public-side employees and representatives (“Public-Siders”) who do not wish to receive material non-public information (within the meaning of United States federal securities laws) with respect to you, your affiliates and any of your securities (“MNPI”) and who may be engaged in investment and other market related activities with respect to your or your affiliates’ securities or loans. Before distribution of any Information Materials, you agree to execute and deliver to us (i) a letter in which you authorize distribution of the Information Materials to a prospective Lender’s employees willing to receive MNPI (“Private-Siders”) and (ii) a separate letter in which you authorize distribution of the Public-Side Version to Public-Siders and represent that no MNPI is contained therein. You agree that the following documents may be distributed to both Private-Siders and Public-Siders in connection with the initial syndication of the Take-Out Facilities, unless you advise the Banks in writing (including by email) within a reasonable time prior to their intended distribution that such materials should only be distributed to Pri-

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vate-Siders: (a) administrative materials prepared by the Banks for prospective Lenders (such as a lender meeting invitation, bank allocation, if any, and funding and closing memoranda), and (b) notification of changes in any Facility’s terms. You hereby authorize the Banks to distribute drafts of definitive documentation with respect to the Take-Out Facilities to Private-Siders and Public-Siders in connection with the initial syndication of the Take-Out Facilities. If you advise us that any of the foregoing should be distributed only to Private-Siders, then Public-Siders will not receive such materials without further discussions with you. Notwithstanding the foregoing, you shall be under no obligation to mark any Information Materials “PUBLIC”.

     Fees and Expenses.

          As consideration for the Commitments of the Lenders hereunder with respect to the Facilities and the agreement of the Joint Lead Arrangers to structure, arrange and syndicate the Facilities, you agree to pay, or cause to be paid, to the Banks the fees set forth in the Term Sheets and the Fee Letter if any, to the extent payable; provided that (x) the expenses referred to in the Tender Term Sheet otherwise payable (if the Tender Closing Date occurs) can be made on the Tender Facility Expense Reimbursement Date (as defined below) and (y) the expenses referred to in the Take-Out Term Sheets otherwise payable on the Take-Out Closing Date (if the Take-Out Closing Date occurs) can be paid as soon as practicable after the Take-Out Closing Date if it is not practical to pay them on the Take-Out Closing Date. The “Tender Facility Expense Reimbursement Date” shall mean (if the Tender Closing Date occurs) the date that is earlier of the maturity date of the Tender Facility and the Take-Out Closing Date; provided that if the Tender Facility matures on the Take-Out Closing Date, the Tender Facility Expense Reimbursement Date can be the date that the expenses referred to in clause (y) are paid.

          In addition, you hereby agree to cause Borrower to reimburse the Banks and the Joint Lead Arrangers (x) on the Tender Facility Expense Reimbursement Date (if the Tender Closing Date occurs) for all reasonable and documented out-of-pocket costs and expenses (including, without limitation, reasonable legal fees and expenses of the Banks and the Joint Lead Arrangers of not more than one counsel with respect to the Tender Facility plus, if necessary, one local counsel per jurisdiction approved by you), incurred in connection with the syndication and execution of the Tender Facility and the preparation, review, negotiation, execution and delivery of this Commitment Letter, the Term Sheets, the Conditions Annex, the Fee Letter and the Tender Documentation and (y) on or promptly after the Take-Out Closing Date (if the Take-Out Closing Date occurs) for all reasonable and documented out-of-pocket costs and expenses (including, without limitation, reasonable legal fees and expenses of the Banks and the Joint Lead Arrangers of not more than one counsel with respect to the Take-Out Facilities plus, if necessary, one local counsel per jurisdiction approved by you, incurred in connection with the syndication and execution of the Take-Out Facilities and the preparation, review, negotiation, execution and delivery of the First Lien Documentation and the Second Lien Documentation.

     Conditions.

          The commitments of the Banks and obligations of the Joint Lead Arrangers hereunder with respect to each of the Facilities are subject to the conditions set forth in the Term Sheet or the Conditions Annex applicable to such Facility are satisfied or waived.

          Notwithstanding anything in this Commitment Letter, the Term Sheets, the Fee Letter, the definitive documentation for any of the Facilities or any other letter agreement or other undertaking concerning the financing of the Transactions to the contrary, (i) the only representations and warranties the making of which shall be a condition to availability of the (x) Tender Facility on the Tender Closing Date shall be (A) such of the representations made by the Acquired Business in the Merger Agreement as is material to the interests of the Lenders thereunder, but only to the extent that you have the right to ter-

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minate your obligations under the Merger Agreement as a result of a breach of such representations in the Merger Agreement and (B) the Specified Representations (as defined below) and (y) Take-Out Facilities on the Take-Out Closing Date shall be (A) such of the representations made by the Acquired Business in the Merger Agreement as is material to the interests of the Lenders thereunder, but only to the extent that you have the right to terminate your obligations under the Merger Agreement as a result of a breach of such representations in the Merger Agreement and (B) the Specified Representations, (ii) the terms of the definitive documentation for the Facilities shall be in a form such that they do not impair availability of the Facilities on the Tender Closing Date or the Take-Out Closing Date, as the case may be, if the conditions set forth under the heading “Conditions” herein and in the applicable Term Sheets and in the applicable section of Annex IV attached hereto are satisfied and (iii) it is understood that to the extent any guarantee or collateral is not provided on the Tender Closing Date or the Take-Out Closing Date, as the case may be, after your use of commercially reasonable efforts to do so, the delivery of such guarantee and/or collateral shall not constitute a condition precedent to the availability of the Facilities on the Tender Closing Date or the Take-Out Closing Date, as the case may be, but shall be required to be delivered after the Tender Closing Date or the Take-Out Closing Date, as the case may be, pursuant to arrangements to be mutually agreed by the parties hereto acting reasonably. For purposes hereof, “Specified Representations” means the representations and warranties set forth in the Term Sheets relating to corporate power and authority, the enforceability of the Facilities documentation, Federal Reserve margin regulations and the Investment Company Act.

     Clear Market.

          From the date of this Commitment Letter until the earlier of our completion of syndication (as reasonably determined by us and notified in writing to you) of the Facilities and the Take-Out Closing Date, you will ensure that no debt financing (other than the financings contemplated hereby) for Holdings or any of its subsidiaries (and will use commercially reasonable efforts to ensure that no debt financing for the Acquired Business or any of its subsidiaries) is syndicated or placed without the prior written consent of the Joint Lead Arrangers if such financing, syndication or placement would have, in the reasonable judgment of the Joint Lead Arrangers, a materially detrimental effect upon such syndication.

     Indemnity.

          You agree to indemnify and hold harmless the Joint Lead Arrangers, the Banks and each of their respective affiliates and their respective officers, directors, employees, agents, advisors and successors (each, an “Indemnified Person”) from and against any and all losses, claims, damages, liabilities and expenses, joint or several, to which any such Indemnified Person may become subject arising out of or in connection with this Commitment Letter, the Fee Letter, the Transactions, the Facilities or any related transaction or any claim, litigation, investigation or proceeding relating to any of the foregoing, regardless of whether any such Indemnified Person is a party thereto (and regardless of whether such matter is initiated by a third party or by the Acquired Business or any of its affiliates), and to reimburse each such Indemnified Person upon demand for any reasonable out-of-pocket legal or other reasonable out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing, provided that the foregoing indemnity will not, as to any Indemnified Person, apply to losses, claims, damages, liabilities or related expenses to the extent they are found in a final, non-appealable judgment of a court of competent jurisdiction (or a settlement tantamount thereto) to have resulted from the willful misconduct, gross negligence or bad faith of such Indemnified Person or any Related Person (as defined below) of such Indemnified Person. For purposes hereof, a “Related Person” of an Indemnified Person means: (i) if the Indemnified Person is any of the Joint Lead Arrangers or any of their respective affiliates, or any of their respective officers, directors, employees and agents, any of the Joint Lead Arrangers and their respective affiliates and their respective officers, directors, employees and agents or (ii) if the Indemnified Person is any Bank or any of its affiliates, or any of their respective officers, directors, employees and

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agents, any Bank and its affiliates and the their respective officers, directors, employees and agent. Notwithstanding any other provision of this Commitment Letter, no Indemnified Person shall be liable for any damages arising from the unauthorized use by others of information or other materials obtained through electronic or telecommunications information transmission systems and no party hereto nor any Indemnified Party shall be liable for any indirect, special, punitive or consequential damages in connection with its activities related to the Facilities.

     Confidentiality.

          This Commitment Letter is entered into upon the condition that neither the existence of this Commitment Letter, the Term Sheets, the Conditions Annex or the Fee Letter nor any of their contents shall be disclosed by any Bank or either Joint Lead Arranger or any of their respective affiliates, or by you or any of your affiliates, directly or indirectly, to any other person, except that such existence and contents may be disclosed (i) as may be compelled in a judicial or administrative proceeding or as otherwise required by law or the Securities and Exchange Commission, (ii) if such proposed disclosure is consented to by the Commitment Parties (such consent not to be unreasonably withheld), (iii) in the case of the Term Sheets and the Conditions Annex, to any actual or prospective investor solely in connection with their consideration of the Transactions, any of their respective affiliates, and any of the respective directors, officers, employees, affiliates, advisors and agents of any of the foregoing, (iv) to the extent necessary in connection with the exercise of any remedy hereunder and (v) to the Commitment Parties and their respective affiliates’ directors, officers, employees, affiliates, advisors and agents and to your directors, officers, employees, affiliates, advisors and agents, in each case on a confidential and “need-to-know” basis and only in connection with the transactions contemplated hereby, and as reasonably required for the syndication. In addition, this Commitment Letter, the Term Sheets, the Conditions Annex and the Fee Letter (but only with appropriate redactions to the Fee Letter to delete all fee amounts) may be disclosed to the Acquired Business and its directors, officers, employees, affiliates, advisors and agents, in each case on a confidential and “need-to-know” basis and only in connection with the transactions contemplated hereby.

     Other Services.

          You acknowledge that the Banks and their respective affiliates (the term “Banks” as used below in this paragraph being understood to include such affiliates) may be providing debt financing, equity capital or other services (including financial advisory services) to other companies in respect of which you may have conflicting interests regarding the transactions described herein and otherwise. No Commitment Party will use information obtained from you by virtue of the transactions contemplated by this Commitment Letter or its other relationships with you in connection with the performance by such Commitment Party of services for other companies, and no Commitment Party will furnish any such information to other companies. You also acknowledge that no Commitment Party has an obligation to use in connection with the transactions contemplated by this Commitment Letter, or to furnish to you, the Borrower or the Sponsor (or any of your or their respective affiliates), confidential information obtained from other companies. You further acknowledge that the Joint Lead Arrangers are full service securities firms and they and each Commitment Party may from time to time effect transactions, for its own or its affiliates’ account or the account of customers, and hold positions in loans, securities or options on loans or securities of Holdings, Borrower, their affiliates and other companies that may be the subject of the transactions contemplated by this Commitment Letter.

          You further acknowledge and agree that (a) no fiduciary, advisory or agency relationship between you and the Joint Lead Arrangers is intended to be or has been created in respect of any of the transactions contemplated by this Commitment Letter, irrespective of whether the Joint Lead Arrangers and/or their respective affiliates have advised or are advising you on other matters, (b) the Joint Lead Ar-

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rangers, on the one hand, and you, on the other hand, have an arm’s-length business relationship that does not directly or indirectly give rise to, nor do you rely on, any fiduciary duty on the part of the Joint Lead Arrangers, (c) you are capable of evaluating and understanding, and you understand and accept, the terms, risks and conditions of the transactions contemplated by this Commitment Letter and (d) you have been advised that the Joint Lead Arrangers and their respective affiliates are engaged in a broad range of transactions that may involve interests that differ from your interests and that the Joint Lead Arrangers have no obligation to disclose such interests and transactions to you by virtue of any fiduciary, advisory or agency relationship in respect hereof.

     Governing Law, Etc.

          This Commitment Letter and the commitment of the Lenders shall not be assignable by any party hereto without the prior written consent of each other party hereto, and any purported assignment without such consent shall be void; provided, however, that you may assign your rights and delegate your obligations hereunder to one or more affiliates of Sponsor controlled by Sponsor and formed for the purpose of effecting the Acquisition, and upon such assignment and delegation, your obligations hereunder shall terminate and the assignee shall be bound hereunder. This Commitment Letter may not be amended or any provision hereof waived or modified except by an instrument in writing signed by each Bank, the Joint Lead Arrangers and you. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission or electronic photocopy (i.e., “pdf”) shall be effective as delivery of a manually executed counterpart of this Commitment Letter. Headings are for convenience only. This Commitment Letter is intended to be for the benefit of the parties hereto and is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto, the Lenders and, with respect to the indemnification provided under the heading “Indemnity,” each Indemnified Person. This Commitment Letter shall be governed by, and construed in accordance with, the laws of the State of New York without regard to principles of conflicts of law to the extent that the same are not mandatorily applicable by statute and the application of the laws of another jurisdiction will be required thereby. Any right to trial by jury with respect to any claim or action arising out of this Commitment Letter is hereby waived. To the fullest extent permitted by applicable law, the parties hereto hereby submit to the non-exclusive jurisdiction of the federal and New York State courts located in The City of New York (and appellate courts thereof) in connection with any dispute related to this Commitment Letter or any of the matters contemplated hereby. To the fullest extent permitted by applicable law, the parties hereto irrevocably and unconditionally waive any objection to the laying of such venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding has been brought in an inconvenient forum. A final judgment in any such suit, action or proceeding brought in any such court may be enforced in any other courts to whose jurisdiction the party subject to such judgment is or may be subject by suit upon judgment.

     Patriot Act.

          We hereby notify you that pursuant to the requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Patriot Act”), the Banks, the Joint Lead Arrangers, and the Lenders are required to obtain, verify and record information that identifies Borrower, which information includes the name, address and tax identification number of Borrower and other information regarding Borrower that will allow the Banks, the Joint Lead Arrangers, or such Lender to identify Borrower in accordance with the Patriot Act. This notice is given in accordance with the requirements of the Patriot Act and is effective as to the Banks, the Joint Lead Arrangers, and the Lenders.

* * *

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          Please indicate your acceptance of the terms hereof and of the Term Sheets, the Conditions Annex and the Fee Letter by returning to us executed counterparts of this Commitment Letter and the Fee Letter not later than 5:00 p.m., New York City time, on January 20, 2007. This Commitment Letter and the agreement of each of the Joint Lead Arrangers to provide the services described herein are also conditioned upon your acceptance hereof and of the Fee Letter, and our receipt of executed counterparts hereof and thereof. With respect to (x) the Tender Facility, upon the earliest to occur of (A) the execution and delivery of the Tender Documentation by all of the parties thereto, (B) June 30, 2007, if the Tender Closing Date has not occurred on or prior to such date, (C) the date on which the Tender Offer is abandoned, withdrawn or terminated and (D) the later of the date that is 14 days after the End Date as defined in the Merger Agreement (including any extension pursuant to Section 7.1(b) thereof), but in no event later than October 15, 2007, then the commitment for the Tender Facility pursuant to this Commitment Letter and the agreement of the Joint Lead Arrangers to provide the services described herein with respect to the Tender Facility shall automatically terminate unless the Banks shall, in their discretion, agree to an extension and (y) the Take-Out Facilities, upon the earliest to occur of (A) the termination of the commitment for the Tender Facility pursuant to clause (x)(B) or (x)(C) above, (B) the execution and delivery of the First Lien Documentation and the Second Lien Documentation by all of the parties thereto or (C) the later of the date that is 14 days after the End Date as defined in the Merger Agreement (including any extension pursuant to Section 7.1(b) thereof), but in no event later than October 15, 2007, if the First Lien Documentation and the Second Lien Documentation shall not have been executed and delivered by you, Borrower and/or one or more affiliates of Sponsor controlled by Sponsor and formed for the purpose of effecting the Acquisition prior to that date, then this Commitment Letter and the agreement of the Joint Lead Arrangers to provide the services described herein shall automatically terminate unless the Banks shall, in their discretion, agree to an extension. The compensation, expense reimbursement, confidentiality, indemnification and governing law and forum provisions hereof and in the Term Sheets and the Fee Letter shall survive termination of this Commitment Letter (or any portion hereof) or the commitments of the Lenders hereunder; provided that the terms of the compensation, expense reimbursement and indemnification provisions contained herein shall (x) to the extent relating to the Tender Facility, automatically terminate and be superseded by the definitive documentation for the Tender Facility upon the funding thereunder and (y) to the extent relating to the Take-Out Facilities, automatically terminate and be superseded by the definitive documentation for the Take-Out Facilities upon the initial funding thereunder.

[Signature Page Follows]

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          We are pleased to have been given the opportunity to assist you in connection with the financing for the Transactions.

Very truly yours, BANK OF AMERICA, N.A.
By:	/s/ John McCusker
	Name:	John McCusker
	Title:	Managing Director
BANC OF AMERICA SECURITIES LLC
By:	/s/ John McCusker
	Name:	John McCusker
	Title:	Managing Director

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MERRILL LYNCH CAPITAL CORPORATION
By:	/s/ Sarang Gadkari
	Name:	Sarang Gadkari
	Title:	Vice President
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:	/s/ Sarang Gadkari
	Name:	Sarang Gadkari
	Title:	Vice President

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GENERAL ELECTRIC CAPITAL CORPORATION
By:	/s/ Daniel McCready
	Name:	Daniel McCready
	Title:	Managing Director

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Accepted and agreed to as of the date first written above: CGEA HOLDINGS, INC
	By:	/s/ Glenn A. Youngkin
		Name:  Glenn A. Youngkin
		Title:    Managing Director

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ANNEX I

SUMMARY OF PRINCIPAL TERMS AND CONDITIONS

Tender Facility ¹

Borrower:	A wholly owned subsidiary of Holdings (“Borrower”) that owns all of the capital stock of the entity that will purchase the Shares in the Tender Offer (“Bidco”).
Holdings:	A wholly-owned subsidiary of Parent and the direct parent of Borrower.
Joint Lead Arrangers:	Banc of America Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the “Joint Lead Arrangers”).
Lenders:	A syndicate of banks, financial institutions and other entities, including Banc of America, N.A. (“Bank of America”), Merrill Lynch Capital Corporation and General Electric Capital Corporation (collectively, the “Banks”), arranged by the Joint Lead Arrangers (together with the Banks, the “Lenders”); provided that any such syndication shall comply with the terms and conditions set forth in the Commitment Letter.
Administrative Agent and Collateral Agent:	Bank of America.
Syndication Agent:	Merrill Lynch Capital Corporation.
Documentation Agent:	General Electric Capital Corporation.
Type and Amount of Facilities:	Tender Facility (the “Tender Facility,” and the loans thereunder, the “Tender Loans”) in an aggregate principal amount of $465.0 million.
Purpose:	Proceeds of the Tender Facility may be used solely (i) to finance the purchase of Shares by Bidco in the Tender Offer, (ii) to finance the payment of consideration in the Short Form Merger, and (iii) to pay related transaction costs, fees and expenses. Amounts borrowed under the Tender Facility that are repaid or prepaid may not be reborrowed. The date of the making of the initial extension of credit under Tender Facility must occur no later than June 30, 2007.

¹ All capitalized terms used but not defined herein shall have the meanings provided in the Commitment Letter to which this summary is attached.

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Definitive Documentation:	Consistent with documentation for transactions of this type done by major private equity sponsors. The Tender Documentation shall not contain any representation or warranty, affirmative or negative covenant or event of default not set forth in the Commitment Letter or the Annexes thereto, the accuracy, compliance or absence, respectively, of or with which would be a condition to the initial borrowing under the Tender Facility. It is acknowledged and agreed that the Commitment Letter (including the annexes and exhibits hereto) sets forth the material terms of the Tender Documentation.
Maturity Date:	The Tender Facility will mature on the earliest of (a) the Long Form Merger Closing Date and (b) 180 days after the Tender Closing Date (as defined below).
Availability:	The Tender Facility will first be made available to Borrower on the date on which conditions relating thereto set forth in the Commitment Letter, this Term Sheet and Section (A) of Annex IV are met (the “Tender Closing Date”) and subsequently in additional drawings in minimum amounts to be agreed not more than 30 days following the Tender Closing Date.
Interest:	At Borrower’s option, loans will bear interest based on the Base Rate or LIBOR (including with respect to borrowings on the Tender Closing Date), as described below:
	A. Base Rate Option
	Interest will be at the Base Rate plus the applicable Interest Margin, calculated on the basis of the actual number of days elapsed in a year of 365/66 days and payable quarterly in arrears. The Base Rate is defined as the higher of the Federal Funds Rate, as published by the Federal Reserve Bank of New York, plus 1/2 of 1% and the prime commercial lending rate of the Administrative Agent for the Tender Facility, as established from time to time at its principal U.S. office.
	Base Rate borrowings will require one business day’s prior notice and will be in minimum amounts to be agreed upon.
	B. LIBOR Option
	Interest will be determined for periods (“Interest Periods”) of one, two, three or six months (as selected by Borrower) and will be at an annual rate equal to the London Interbank Offered Rate (“LIBOR”) for the corresponding deposits of U.S. dollars, plus the applicable Interest Margin. LIBOR will be determined by the Administrative Agent at the start of each Interest Period and will be fixed through such period. Interest will be paid at the end of each Interest Period or, in the case of Interest Periods longer than three months, quarterly, and will be calculated on the basis

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	of the actual number of days elapsed in a year of 360 days. LIBOR will be adjusted for maximum statutory reserve requirements (if any) consistent with documentation for recent transactions for companies owned by Sponsor.
	LIBOR borrowings will require three business days’ prior notice and will be in minimum amounts to be agreed upon.
Default Interest:	Upon the occurrence and during the continuance of a payment default, interest will accrue on any overdue amount of a loan or other overdue amount payable under the Tender Facility at a rate of 2.0% per annum in excess of the rate (including the applicable Interest Margin) otherwise applicable to such loan or other amount and will be payable on demand.
Interest Margins:	The applicable Interest Margin will be the percentages set forth in the following table.

Base Rate			LIBOR
Loans			Loans
	2.00	%		3.00	%

Commitment Fee:	A per annum commitment fee on the undrawn portion of the commitments in respect of the Tender Facility shall accrue from the Tender Closing Date at the rate per annum equal 0.50%; provided that such commitment fee shall only be payable if the commitments for the Tender Facility shall have not been terminated on or prior to the date that is 15 days following the Tender Closing Date.
Optional Prepayments and Reduction of Commitments:	Loans under the Tender Facility may be prepaid and commitments may be reduced by Borrower, in minimum amounts to be agreed upon, at Borrower’s option at any time without penalty, premium or fees (subject to breakage costs). Amounts prepaid in respect of the Tender Facility may not be reborrowed.
Guarantees:	The Tender Facility will be fully and unconditionally guaranteed (the “Guarantees”) by Holdings and, prior to the consummation of the Short Form Merger, Bidco (the “Guarantors”).
Security:	The Tender Facility and the Guarantees will be secured (on a first priority basis) by a perfected lien on, and pledge of, and security interest in (i) the Shares, (ii) all of the capital stock of Borrower and Bidco (and, upon and after the Short Form Merger, the capital stock of Elk), (iii) the Tender Facility Interest Support and (iv) substantially all other tangible and intangible property and assets of the Borrower, Holdings and, prior to the consummation of the Short Form Merger, Bidco. Holdings, Borrower and, prior to the consummation of the Short Form Merger, Bidco

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	shall not be permitted to acquire or hold material assets other than the Shares.
Conditions to Each Borrowing:	Subject to the second paragraph under “Conditions” in the Commitment Letter, conditions precedent to each borrowing under the Tender Facility will be those set forth under the heading “Conditions” in the Commitment Letter and in Section (A) of Annex IV to the Commitment Letter and the following: (1) the absence of any continuing default or event of default (other than breach of a representation which is not a condition to closing), (2) the accuracy in all material respects of representations and warranties that relate to the due authorization, execution, delivery, legality, validity, binding effect and enforceability of the Tender Documentation, (3) accuracy in all material respects of those representations and warranties set forth in the Merger Agreement (and referred to in the second paragraph under “Conditions” in the Commitment Letter) to the extent that you have the right to terminate your obligations under the Merger Agreement as a result of a breach of such representation or warranty in the Merger Agreement, which shall, on the Tender Closing Date only, constitute representations and warranties under the Tender Facility and (4) delivery of Form U-1 appropriately completed and (5) after giving effect to such borrowing, the amount outstanding under the Tender Facility shall be no more than 50% of the then current market value of the Shares securing the Tender Facility.
Representations and Warranties:	The following representations and warranties will apply, subject to materiality thresholds and exceptions to be agreed and consistent with documentation for recent transactions of this type done by major private equity sponsors, to Holdings, Borrower and, prior to the consummation of the Short Form Merger, Bidco: financial statements (including pro forma financial statements); no material adverse change; corporate existence; compliance with material laws; corporate power and authority; enforceability of the Tender Documentation; no conflict with law or material contractual obligations; no material litigation; no default; ownership of property; absence of liens other than permitted liens; intellectual property; taxes; Federal Reserve regulations; ERISA; Investment Company Act; environmental matters; solvency; accuracy of disclosure; and creation and perfection of security interests.
Reporting Covenants:	Borrower shall be required to give notice of default and material litigation and such other information that the Lenders may reasonably request regarding its ownership of the Shares and progress of the Tender Offer.
Affirmative Covenants:	The following affirmative covenants will apply, subject to materiality thresholds and consistent with transactions of this type done by major private equity sponsors, to Holdings, Borrower

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	and, prior to the consummation of the Short Form Merger, Bidco: delivery of financial and other information (certified quarterly (for the first three quarters of the fiscal year)) and audited annual financial statements of Elk (when made available to Borrower), notices of defaults, litigation and other material events and budgets; payment of taxes and other material obligations; continuation of business and maintenance of existence and material rights and privileges; compliance with applicable laws and regulations (including, without limitation, environmental matters, taxation and ERISA); maintenance of property and insurance; maintenance of books and records; right to inspect property and books and records; and further assurances with respect to security interests in after-acquired property.
Negative Covenants:	Holdings, the Borrower and, prior to the consummation of the Short Form Merger, Bidco shall not be permitted to engage in any other activities, own any assets or incur any liabilities other than (a) Bidco owning and purchasing the Shares in the Tender Offer and the exercise of the “top-up” option under the Merger Agreement and the incurrence of subordinated debt in connection therewith and activities incidental thereto, (b) their obligations under the Merger Agreement, the agreement and plan of merger among Parent, Hood Companies, Inc., Atlas Roofing Corporation and Atlas Roofing LLC and dated December 18, 2006 as amended through the date hereof, the Commitment Letter and the Fee Letter, (c) actions incidental to the consummation of the Transactions and (d) activities incidental to their maintenance and continuance and to the foregoing activities. In addition, the operations of Elk and its subsidiaries on and after the Tender Closing Date shall be subject to restrictions reasonably agreed to by the Borrower and the Joint Lead Arrangers, but in no event shall such restrictions be more onerous than those under Elk’s credit agreement as in effect on the date of the Commitment Letter.
Events of Default:	Modification or waiver of the Merger Agreement in a manner that is materially adverse to Lenders prior to final consummation thereof, nonpayment, breach of representations and covenants, cross defaults, loss of significant lien on collateral, invalidity of significant guarantees, bankruptcy and insolvency events, ERISA events, judgments and change of control (to be defined), in each case subject to grace periods, materiality thresholds and exceptions to be agreed and consistent with documentation for recent transactions of this type done by major private equity sponsors.
Assignments and Participations:	Each Lender may assign all or, subject to minimum amounts to be agreed, a portion of its loans and commitments under one or more of the Tender Facility (other than to certain persons designated in writing by Borrower on or prior to the Tender Closing Date). Assignments will require the consent of the Administra-

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	tive Agent and Borrower, which consents shall not be unreasonably withheld; provided that (i) no consents shall be required for an assignment to an existing Lender or an affiliate of an existing Lender and (ii) no consent of Borrower shall be required during the continuance of a payment or bankruptcy event of default. In addition, each Lender may sell participations in all or a portion of its loans under the Tender Facility (other than to certain persons designated in writing by Borrower on or prior to the Tender Closing Date); provided that no purchaser of a participation shall have (a) the right to exercise or to cause the selling Lender to exercise voting rights in respect of the Tender Facility (except as to certain customary issues) or (b) the right to yield protection in an amount exceeding that available to the relevant Lender.
Expenses and Indemnification:	All reasonable and documented out-of-pocket expenses (including but not limited to reasonable legal fees and expenses of not more than one counsel plus, if necessary, one local counsel per jurisdiction approved by Borrower) and expenses incurred in connection with due diligence and travel, courier, reproduction, printing and delivery expenses) of the Banks, the Joint Lead Arrangers, the Administrative Agent and the Collateral Agent associated with the syndication of the Tender Facility and with the preparation, execution and delivery, administration, amendment, waiver or modification (including proposed amendments, waivers or modifications) of the documentation contemplated hereby are to be paid by Borrower on and after the Tender Facility Expense Reimbursement Date (if the Tender Closing Date occurs). In addition, all reasonable and documented out-of-pocket expenses (including but not limited to reasonable legal fees and expenses of not more than one counsel plus, if necessary, one local counsel per jurisdiction approved by Borrower) of the Lenders and the Administrative Agent for workout proceedings and enforcement costs associated with the Tender Facility are to be paid by Borrower.
	Borrower will indemnify the Lenders, the Joint Lead Arrangers, the Administrative Agent and the Collateral Agent and their respective affiliates, and hold them harmless from and against all reasonable and documented out-of-pocket costs, expenses (including but not limited to reasonable legal fees and expenses of not more than one counsel plus, if necessary, one local counsel per jurisdiction approved by Borrower) and liabilities arising out of or relating to the transactions contemplated hereby and any actual or proposed use of the proceeds of any loans made under the Tender Facility; provided, however, that no such person will be indemnified for costs, expenses or liabilities to the extent determined by a final judgment of a court of competent jurisdiction (or a settlement tantamount to such a judgment) to have been incurred (i) by reason of the bad faith, gross negligence or willful misconduct of such person or any person affiliated therewith, (ii)

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	by breach by such person or a related party of such person of the definitive documentation with respect to the Tender Facility or (iii) any claims of an Indemnified Person against any other Indemnified Person.
Yield Protection, Taxes and Other Deductions:	The Tender Documentation will contain yield protection provisions, customary for facilities of this nature and consistent with documentation for transactions for companies owned by Sponsor, protecting the Lenders in the event of unavailability of LIBOR, breakage losses, reserve and capital adequacy requirements.
	All payments are to be free and clear of any present or future taxes, withholdings or other deductions whatsoever (other than income taxes in the jurisdiction of the Lender’s applicable lending office). The Lenders will use reasonable efforts to minimize to the extent possible any applicable taxes and Borrower will indemnify the Lenders and the Administrative Agent for such taxes paid by the Lenders or the Administrative Agent.
Requisite Lenders:	Lenders holding at least a majority of total loans and commitments under the Tender Facility, with certain amendments requiring the consent of Lenders holding a greater percentage (or each Lender affected) of the total loans and commitments under the Tender Facility (subject to a “yank-a-bank” provision), it being understood that amendments to financial definitions will require the consent of Lenders holding no more than a majority of total loans and commitments.
	The consent of each Lender directly and adversely affected thereby will be required with respect to (a) reductions in the amount or extensions of the scheduled date of final maturity of any loan or reductions or extensions of any amortization payment, (b) reductions in the rate of interest or any fee or extensions of any due date thereof, (c) modifications to any of the voting percentages and (d) increases in the amount or extensions of the expiry date of any Lender’s commitment and (ii) the consent of 100% of the Lenders will be required with respect to releases of all or substantially all of the collateral or all or substantially all of the guarantees other than in accordance with the provisions of the definitive documentation with respect to the Tender Facility.
Governing Law and Forum:	The laws of the State of New York. Each party to the Tender Documentation will waive the right to trial by jury and will consent to jurisdiction of the state and federal courts located in The City of New York.

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ANNEX II

SUMMARY OF PRINCIPAL TERMS AND CONDITIONS

First Lien Bank Facilities ²

Borrower:	A wholly owned subsidiary of Holdings that will, immediately following the Take-Out Closing Date, merge with and into Elk.
Holdings:	A wholly-owned subsidiary of Parent and the direct parent of Borrower.
Joint Lead Arrangers:	Banc of America Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the “Joint Lead Arrangers”).
Lenders:	A syndicate of banks, financial institutions and other entities, including Bank of America, N.A., Merrill Lynch Capital Corporation and General Electric Capital Corporation (collectively, the “Banks”), arranged by the Joint Lead Arrangers (together with the Banks, the “Lenders”); provided that any such syndication shall comply with the terms and conditions set forth in the Commitment Letter.
Administrative Agent, Collateral Agent, Issuing Bank and Swing Line Lender:	Bank of America, N.A.
Syndication Agent:	Merrill Lynch Capital Corporation.
Documentation Agent:	General Electric Capital Corporation.
Type and Amount of Facilities:	First Lien Term Loan Facility:
	First Lien Term Loan Facility (the “First Lien Term Loan Facility,” and the loans thereunder, the “First Lien Term Loans”) in an aggregate principal amount of $450.0 million.
Revolving Credit Facility:	A revolving credit facility (the “Revolving Credit Facility,” and the loans thereunder, the “Revolving Credit Loans”) in an aggregate principal amount of $100.0 million. The First Lien Term Loan Facility and the Revolving Credit Facility are herein referred to collectively as the “First Lien Bank Facilities.”

² All capitalized terms used but not defined herein shall have the meanings provided in the Commitment Letter to which this summary is attached.

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Incremental Facility:	Borrower shall be entitled (i) to incur additional term loans under the First Lien Term Loan Facility or under a new first lien term loan facility to be included in the First Lien Bank Facilities (the “Additional First Lien Term Loans”) or (ii) to obtain additional revolving credit commitments under the Revolving Credit Facility or under a new revolving credit facility to be included in the First Lien Bank Facilities (the “Additional Revolving Commitments” and together with the Additional First Lien Term Loans, the “Additional Facility Increase”), in an aggregate principal amount of (when taken together with the Additional Second Lien Term Loans) up to $80.0 million and to have the same guarantees as, and be secured on a pari passu basis by the same collateral securing, the First Lien Bank Facilities; provided that (i) no event of default or default exists or would exist after giving effect thereto, (ii) the maturity date of the Additional First Lien Term Loans shall be no earlier than the maturity date of the First Lien Term Loan Facility and the maturity date of the Additional Revolving Commitments shall be no earlier than the maturity date of the Revolving Credit Facility, (iii) the average life to maturity of the Additional First Lien Term Loans shall be no shorter than the remaining average life to maturity of the First Lien Term Loan Facility and (iv) the other terms and documentation in the respect thereof, to the extent not consistent with the First Lien Bank Facilities, shall otherwise be reasonably satisfactory to the Joint Lead Arrangers.
Purpose:	Proceeds of the First Lien Term Loan Facility and up to an amount to be agreed of the Revolving Credit Facility may be used on the Take-Out Closing Date to pay the consideration in the Long Form Merger, refinance the Tender Facility, redeem or repay the Interim Equity Financing, effect the Refinancing and pay fees, commissions and expenses in connection therewith and the Tender Offer Facility. Following the Take-Out Closing Date, the Revolving Credit Facility will be used by Borrower and its subsidiaries for capital expenditures, acquisitions, investments, working capital and general corporate purposes.
Take-Out Closing Date:	The date of funding of the First Lien Bank Facilities.
Definitive Documentation:	Consistent with recent transactions for companies owned by Sponsor; provided that Adjusted EBITDA and Consolidated Net Income shall be defined as set forth on Annex IV to this Commitment Letter. The First Lien Documentation shall not contain any representation or warranty, affirmative or negative covenant or event of default not set forth in the Commitment Letter or the Annexes thereto, the accuracy, compliance or absence, respectively, of or with which would be a condition to the initial borrowing under the First Lien Bank Facilities. It is acknowledged and agreed that the Commitment Letter (including the annexes

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	and exhibits hereto) sets forth the material terms of the First Lien Documentation.
Maturity Dates:	First Lien Term Loan Facility: Seven years from the Take-Out Closing Date.
	Revolving Credit Facility: Six years from the Take-Out Closing Date.
Availability:	First Lien Term Loan Facility: A single drawing may be made on the Take-Out Closing Date of the full amount of the First Lien Term Facility.
	Revolving Credit Facility: Borrowings may be made at any time from and after the Take-Out Closing Date to but excluding the business day preceding the maturity date of the Revolving Credit Facility.
Letters of Credit:	Up to an agreed amount of the Revolving Credit Facility will be available for letters of credit, on customary terms and conditions to be set forth in the First Lien Documentation.
	Each letter of credit shall expire not later than the earlier of (a) one year after its date of issuance unless otherwise agreed by the issuing bank thereof and the Administrative Agent and (b) the third day prior to the maturity date of the Revolving Credit Facility; provided that any letter of credit with a one-year tenor may provide for the renewal thereof for additional one-year periods (which shall in no event extend beyond the date referred to in clause (b) above without the consent of the Issuing Bank).
Swing Line Facility:	Up to an agreed amount of the Revolving Credit Facility will be available for swingline loans on same day notice and on terms and conditions to be set forth in the First Lien Documentation.
Amortization:	First Lien Term Loan Facility: The First Lien Term Loan Facility will amortize in equal quarterly installments in an amount equal to 1% per annum with the balance due at maturity.
Revolving Credit Facility:	None.
Interest:	At Borrower’s option, loans will bear interest based on the Base Rate or LIBOR (including with respect to borrowings on the Take-Out Closing Date), as described below:
	A. Base Rate Option
	Interest will be at the Base Rate plus the applicable Interest Margin, calculated on the basis of the actual number of days elapsed in a year of 365/66 days and payable quarterly in arrears. The Base Rate is defined as the higher of the Federal Funds Rate, as

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	published by the Federal Reserve Bank of New York, plus 1/2 of 1% and the prime commercial lending rate of the Administrative Agent for the First Lien Bank Facilities, as established from time to time at its principal U.S. office.
	Base Rate borrowings will require one business day’s prior notice and will be in minimum amounts to be agreed upon.
	B. LIBOR Option
	Interest will be determined for periods (“Interest Periods”) of one, two, three or six or, if available to all relevant Lenders, nine or twelve months (as selected by Borrower) and will be at an annual rate equal to the London Interbank Offered Rate (“LIBOR”) for the corresponding deposits of U.S. dollars, plus the applicable Interest Margin. LIBOR will be determined by the Administrative Agent at the start of each Interest Period and will be fixed through such period. Interest will be paid at the end of each Interest Period or, in the case of Interest Periods longer than three months, quarterly, and will be calculated on the basis of the actual number of days elapsed in a year of 360 days. LIBOR will be adjusted for maximum statutory reserve requirements (if any) consistent with documentation for recent transactions for companies owned by Sponsor.
	LIBOR borrowings will require three business days’ prior notice and will be in minimum amounts to be agreed upon.
Default Interest:	Upon the occurrence and during the continuance of a payment default, interest will accrue on any overdue amount of a loan or other overdue amount payable under the First Lien Bank Facilities at a rate of 2.0% per annum in excess of the rate (including the applicable Interest Margin) otherwise applicable to such loan or other amount and will be payable on demand.
Interest Margins:	The applicable Interest Margin will be the percentages set forth in the following table; provided that after the date on which Borrower shall have delivered financial statements for the first full fiscal quarter ending after the Take-Out Closing Date, the Interest Margin with respect to the Revolving Credit Facility will be reduced based on a grid to be agreed.

	Base Rate			LIBOR
	Loans			Loans
First Lien Term Loan Facility		1.25	%		2.25	%
Revolving Credit Facility		1.25	%		2.25	%

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Commitment Fee: A Commitment Fee shall accrue on the unused amounts of the commitments under the Revolving Credit Facility. Such Commitment Fee will initially be 0.50% per annum and after delivery of financial statements for the first full fiscal quarter ending after the Take-Out Closing Date will be reduced based on the following grid:

	Commitment Fee Margin for
Leverage Ratio	Revolving Commitments
³ 4.50:1.00		0.500	%
< 4.50:1.00 and ³ 3.00:1.00		0.375	%
< 3.00:1.00		0.250	%

	Accrued Commitment Fees will be payable quarterly in arrears (calculated on a 365/66-day basis) for the account of the Lenders from the Take-Out Closing Date.
Letter of Credit Fees:	Borrower will pay (i) the Issuing Bank a fronting fee equal to 0.125% per annum and (ii) the Lenders under the Revolving Credit Facility letter of credit participation fees equal to the Applicable Margin for LIBOR Loans under the Revolving Credit Facility minus the fronting fee referred to in clause (i), in each case, on the undrawn amount of all outstanding letters of credit. In addition, Borrower will pay the Issuing Bank customary issuance fees.
Mandatory Prepayments:	An amount equal to (a) 100% of the net cash proceeds received from specified sales or other dispositions of all or any part of the assets of Borrower or any of its restricted subsidiaries after the Take-Out Closing Date other than in the ordinary course and other than amounts reinvested in Borrower’s business within one year of the sale or other disposition (provided that if such amounts are committed to be reinvested within one year of the sale or other disposition, such reinvestment period shall be extended by up to one additional year) and subject to other exceptions to be agreed and consistent with recent transactions for companies owned by Sponsor (including sales or other dispositions generating net cash proceeds not to exceed an amount to be agreed in any fiscal year), (b) 100% of the net cash proceeds received by Borrower or any of its restricted subsidiaries from the issuance of debt after the Take-Out Closing Date, other than debt permitted by the First Lien Documentation, and (c) beginning with the first full fiscal year of Borrower after the Take-Out Closing Date, 50% of excess cash flow of Borrower and its restricted subsidiaries (to be defined in a manner consistent with documentation for recent transactions for companies owned by Sponsor, but in any event to include deductions, without duplication among periods, for operating cash used to finance acquisitions and certain investments in amounts to be agreed and capital

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	expenditures or then committed to be used to finance acquisitions, investments and capital expenditures for which a binding agreement then exists, subject to limitations to be agreed), with step-downs to (i) 25% if Borrower’s Total Leverage Ratio (as defined in Annex IV attached to the Commitment Letter) does not exceed 4.75:1.00 and (ii) 0% if Borrower’s Total Leverage Ratio is less than 4.00:1.00; provided that any voluntary prepayments of the First Lien Term Loans and mandatory prepayments of loans under the Revolving Credit Facility to the extent accompanied by permanent reductions of the commitments thereunder, other than prepayments funded with the proceeds of certain indebtedness, shall be credited against excess cash flow prepayment obligations on a dollar-for-dollar basis.
	There will be no prepayment penalties (except LIBOR breakage costs) for mandatory prepayments.
Optional Prepayments:	Permitted in whole or in part, with one business day’s prior notice in the case of Base Rate Loans and three business day’s prior notice in the case of LIBOR Loans, but without premium or penalty (except LIBOR breakage costs in the case of a prepayment other than on the last day of the relevant interest period) and including accrued and unpaid interest, subject to limitations as to minimum amounts of prepayments.
Application of Prepayments:	Mandatory prepayments may be waived by a Lender and, upon such waiver, the amount of such waived prepayment (“Declined Amounts”) may be retained by the Borrower or applied to the Second Lien Term Loan Facility. Mandatory prepayments not waived by a Lender will otherwise be applied to prepay the First Lien Term Loans only. Prepayments shall be applied in the manner directed by Borrower.
Guarantees:	The First Lien Bank Facilities will be fully and unconditionally guaranteed on a joint and several basis by Holdings and all of the existing and future direct and indirect material wholly-owned domestic subsidiaries of Borrower, subject to exceptions to be agreed (collectively, the “Guarantors”). Certain subsidiaries may be designated and treated as “Unrestricted” on terms consistent with documentation for recent transactions for companies owned by Sponsor.
Security:	The First Lien Bank Facilities and any hedging obligations and, at the Borrower’s option, cash management arrangements to which a Lender or an affiliate of a Lender is a counterparty will be secured by perfected first priority pledges of all of the equity interests of Borrower and each of Borrower’s direct and indirect material domestic subsidiaries and of 65% of the equity interests of Borrower’s direct and indirect “first-tier” material foreign subsidiaries, and perfected first priority security interests in and mortgages on all owned material tangible and intangible assets

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(including, without limitation, accounts receivable, inventory, equipment (excluding vehicles), general intangibles, intercompany promissory notes, insurance policies, investment property, U.S. intellectual property and material owned real property, proceeds of the foregoing (but excluding cash and deposit accounts and leasehold interests and other exceptions to be agreed) of Borrower and the Guarantors, wherever located, now or hereafter owned, except, in the case of any foreign subsidiary, to the extent such pledge or security interest would be prohibited by applicable law or would result in materially adverse tax consequences, and except to the extent the cost of obtaining such pledge or security interest is excessive in relation to the benefit thereof, and subject to other exceptions consistent with transactions for companies owned by Sponsor (collectively, the “Collateral”); provided, however, that if the perfection of the Administrative Agent’s security interest in respect of any Collateral may not be accomplished prior to the Take-Out Closing Date without undue burden or expense, then delivery of documents and instruments for perfection of such security interest shall not constitute a condition precedent to the initial borrowings under the First Lien Bank Facilities if Borrower agrees to deliver or cause to be delivered such documents and instruments, and take or cause to be taken such other actions as may be required to perfect such security interests, within a period after the Take-Out Closing Date reasonably acceptable to the Administrative Agent; provided further that no control agreements over deposit or securities accounts shall be required in connection with the perfection of the Administrative Agent’s security interest in respect of the Collateral.

Intercreditor Arrangements:

An intercreditor agreement shall document the second lien status (on a “silent” basis to the extent consistent with recent Sponsor precedent) of the collateral package for the Second Lien Term Loan Facility, which shall provide, among other things to be determined by the Administrative Agent in respect of the First Lien Bank Facilities and reasonably satisfactory to Borrower, that (a) the Lenders under the First Lien Bank Facilities and any other holders of a first lien on the Collateral (the “Senior Lienholders”) will have a block (for Events of Default other than payment defaults of no less than 180 days and for payment defaults, in each case subject to reinstatement) on the ability of Lenders under the Second Lien Term Loan Facility (the “Second Lien Lenders”) to exercise their remedies with respect to collateral, (b) the Second Lien Lenders will not object to the value of the Senior Lienholders’ claims or plan of reorganization, or receive any proceeds in a reorganization until the Senior Lienholders are repaid in cash in full, (c) the Second Lien Lenders will not object to a “debtor-in-possession” financing of up to an amount to be agreed and (d) the Second Lien Lenders will not object to the Senior Lienholders’ adequate protection.

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Conditions to Initial Borrowings:	Subject to the second paragraph under “Conditions” in the Commitment Letter, conditions precedent to initial borrowings under the First Lien Bank Facilities will be those set forth under the heading “Conditions” in the Commitment Letter and in Section B of Annex IV to the Commitment Letter and the following: (1) the absence of any continuing default or event of default (other than breach of a representation which is not a condition to closing), (2) the accuracy in all material respects of representations and warranties that relate to the due authorization, execution, delivery, legality, validity, binding effect and enforceability of the First Lien Documentation and (3) accuracy in all material respects of those representations and warranties set forth in the Merger Agreement (and referred to in the second paragraph under “Conditions” in the Commitment Letter) to the extent that you have the right to terminate your obligations under the Merger Agreement as a result of a breach of such representation or warranty in the Merger Agreement, which shall, on the Take-Out Closing Date only, constitute representations and warranties under the First Lien Bank Facilities.
Conditions to Each Borrowing (other than the Initial Borrowings):	Conditions precedent to each other borrowing or issuance under the First Lien Bank Facilities will be the following: (1) the absence of any continuing default or event of default and (2) the accuracy of all representations and warranties in all material respects.
Representations and Warranties:	The following representations and warranties will apply, subject to materiality thresholds and exceptions to be agreed and consistent with documentation for recent transactions for companies owned by Sponsor, to Borrower and its subsidiaries (other than, with respect to certain representations and warranties to be agreed, immaterial subsidiaries): financial statements (including pro forma financial statements); no material adverse change; corporate existence; compliance with material laws; corporate power and authority; enforceability of the First Lien Documentation; no conflict with law or material contractual obligations; no material litigation; no default; ownership of property; absence of liens other than permitted liens; intellectual property; taxes; Federal Reserve regulations; ERISA; Investment Company Act; environmental matters; solvency; accuracy of disclosure; and creation and perfection of security interests.
Affirmative Covenants:	The following affirmative covenants will apply, subject to materiality thresholds and exceptions to be agreed reflecting the Acquisition and any other permitted acquisitions and related financings and with such other modifications as may be reasonably necessary to receive operational synergies and consistent with documentation for recent transactions for companies owned by Sponsor, to Borrower and its restricted subsidiaries (other than, with respect to certain affirmative covenants to be agreed, imma-

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	terial subsidiaries): delivery of financial and other information: certified quarterly (for the first three quarters of the fiscal year) and audited annual financial statements, notices of defaults, litigation and other material events and budgets; payment of taxes and other material obligations; continuation of business and maintenance of existence and material rights and privileges; compliance with applicable laws and regulations (including, without limitation, environmental matters, taxation and ERISA); maintenance of property and insurance; maintenance of books and records; right to inspect property and books and records; and further assurances with respect to security interests in after-acquired property.
Negative Covenants:	The following negative covenants will apply, subject to materiality thresholds and exceptions to be agreed reflecting the Acquisition and other permitted acquisitions and related financings and consistent with documentation for recent transactions for companies owned by Sponsor, to Borrower and its restricted subsidiaries (other than, with respect to certain negative covenants to be agreed, immaterial subsidiaries):
	1.   Limitation on asset sales and changes of business and ownership.
	2.   Limitation on mergers and acquisitions (other than (x) acquisitions from the proceeds of equity issuances and excess cash flow not required to be used to prepay the First Lien Term Loans and (y) acquisitions as long as (A) no default exists, (B) the Borrower would be in pro forma compliance with the financial covenants after giving effect thereto and (C) any acquired domestic company and its domestic subsidiaries will become Guarantors of the First Lien Bank Facilities to the extent contemplated under “Guarantees” (with limitations on acquisitions of foreign subsidiaries to be agreed)).
	3.   Limitations on dividends and stock repurchases and redemptions (with permitted dividends to be agreed, including from the proceeds of equity issuances and, at leverage ratios to be agreed, excess cash flow not required to be used to prepay the First Lien Term Loans).
	4.   Limitation on indebtedness (including guarantees and other contingent obligations and other than (i) the incurrence of subordinated indebtedness so long as, on a pro forma basis for such incurrence, Borrower’s Total Leverage Ratio (as defined in Annex V attached to the Commitment Letter) does not exceed 6.25:1.00 and (ii) the incurrence of other indebtedness so long as, on a pro forma basis for such incurrence, Borrower’s Total Lev-

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	erage Ratio (as defined in Annex V attached to the Commitment Letter) does not exceed 4.00:1.00).
	5.   Limitation on investments (with permitted investments to be agreed and other than investments from the proceeds of equity issuances and excess cash flow not required to be used to prepay the First Lien Term Loans).
	6.   Limitation on liens and further negative pledges.
	7.    Limitation on transactions with affiliates.
	8.   Limitation on hedging agreements.
	9.   Prohibition on amendments or prepayments of subordinated indebtedness or indebtedness under the Second Lien Term Loan Facility (other than prepayments of subordinated indebtedness or indebtedness under the Second Lien Term Loan Facility at a leverage level to be agreed from the proceeds of equity issuances and excess cash flow not required to be used to prepay the First Lien Term Loans).
	10.   No modification or waiver of material documents (defined as charter documents of Borrower and its restricted subsidiaries and all documents relating to the Second Lien Term Loan Facility and the Equity Financing) in any manner materially adverse to the Lenders without the consent of the Requisite Lenders.
	11.   No change to fiscal year (other than to a December 31 fiscal year end).
Financial Covenants:	Financial covenants will apply to Borrower and its consolidated subsidiaries beginning with the fiscal quarter beginning October 1, 2007 and will be:
	1.   Maximum Senior Secured Leverage Ratio (as defined in Annex V) with appropriate covenant levels to be agreed and annual step-downs
	2.   Minimum consolidated net cash interest coverage ratio (defined in a manner consistent with documentation for recent transactions for companies owned by Sponsor) with appropriate covenant levels to be agreed and annual step-downs
	Covenants are to be set at no greater than 65% of the agreed-upon plan for the first two fiscal quarters for which the financial covenants are tested and not greater than 70% thereafter (it being understood that the plan most recently provided to the Joint Lead

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	Arrangers prior to the date of execution of the Commitment Letter shall be deemed to be acceptable).
	For purposes of determining compliance with the financial covenants, any investment (which investment shall be equity other than “Disqualified Stock” (as defined in the First Lien Documentation)) made to Borrower by Holdings after the Take-Out Closing Date and on or prior to the day that is 10 days after the day on which financial statements are required to be delivered for a fiscal quarter will, at the request of Borrower, be included in the calculation of Adjusted EBITDA for the purposes of determining compliance with financial covenants at the end of such fiscal quarter and applicable subsequent periods (any such equity contribution so included in the calculation of Adjusted EBITDA, a “Specified Equity Contribution”); provided that (a) in each four fiscal quarter period there shall be a period of at least one fiscal quarter in which no Specified Equity Contribution is made and (b) the amount of any Specified Equity Contribution shall be no greater than the amount required to cause the Borrower to be in compliance with the financial covenants.
Activities of Holdings:	Holdings will not engage at any time in any business or business activity other than (a) financing activities, (b) ownership and acquisition of equity interests in Borrower, together with activities directly related thereto, (c) performance of its obligations in connection with the Merger Agreement and the other agreements contemplated thereby and hereby, (d) actions incidental to the consummation of the Transactions, and (e) activities incidental to its maintenance and continuance and to the foregoing activities, subject, in each case, to exceptions consistent with documentation for recent transactions for companies owned by Sponsor.
Events of Default:	Nonpayment, breach of representations and covenants, cross defaults, loss of significant lien on collateral, invalidity of significant guarantees, bankruptcy and insolvency events, ERISA events, judgments and change of control (to be defined), in each case subject to grace periods, materiality thresholds and exceptions to be agreed and consistent with documentation for recent transactions for companies owned by Sponsor.
Assignments and Participations:	Each Lender may assign all or, subject to minimum amounts to be agreed, a portion of its loans and commitments under one or more of the First Lien Bank Facilities (other than to certain persons designated in writing by Borrower on or prior to the Take-Out Closing Date). Assignments will require the consent of the Administrative Agent, the Issuing Bank (with respect to Revolving Credit Facility loans and commitments) and Borrower, which consents shall not be unreasonably withheld; provided that (i) no consents (except from the Issuing Bank (with respect to Revolving Credit Facility loans and commitments)) shall be required for

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	an assignment to an existing Lender or an affiliate of an existing Lender and (ii) no consent of Borrower shall be required during the continuance of a payment or bankruptcy event of default. In addition, each Lender may sell participations in all or a portion of its loans and commitments under one or more of the First Lien Bank Facilities (other than to certain persons designated in writing by Borrower on or prior to the Take-Out Closing Date); provided that no purchaser of a participation shall have (a) the right to exercise or to cause the selling Lender to exercise voting rights in respect of the First Lien Bank Facilities (except as to certain customary issues) or (b) the right to yield protection in an amount exceeding that available to the relevant Lender.
Expenses and Indemnification:	All reasonable and documented out-of-pocket expenses (including but not limited to reasonable legal fees and expenses of not more than one counsel plus, if necessary, one local counsel per jurisdiction approved by Borrower) and expenses incurred in connection with due diligence and travel, courier, reproduction, printing and delivery expenses) of the Banks, the Joint Lead Arrangers, the Administrative Agent and the Collateral Agent associated with the syndication of the First Lien Bank Facilities and with the preparation, execution and delivery, administration, amendment, waiver or modification (including proposed amendments, waivers or modifications) of the documentation contemplated hereby are to be paid by Borrower on and after the Take-Out Closing Date, if it occurs. In addition, all reasonable and documented out-of-pocket expenses (including but not limited to reasonable legal fees and expenses of not more than one counsel plus, if necessary, one local counsel per jurisdiction approved by Borrower) of the Lenders and the Administrative Agent for workout proceedings and enforcement costs associated with the First Lien Bank Facilities are to be paid by Borrower.
	Borrower will indemnify the Lenders, the Joint Lead Arrangers, the Administrative Agent and the Collateral Agent and their respective affiliates, and hold them harmless from and against all reasonable and documented out-of-pocket costs, expenses (including but not limited to reasonable legal fees and expenses of not more than one counsel plus, if necessary, one local counsel per jurisdiction approved by Borrower) and liabilities arising out of or relating to the transactions contemplated hereby and any actual or proposed use of the proceeds of any loans made under the First Lien Bank Facilities; provided, however, that no such person will be indemnified for costs, expenses or liabilities to the extent determined by a final judgment of a court of competent jurisdiction (or a settlement tantamount to such a judgment) to have been incurred (i) by reason of the bad faith, gross negligence or willful misconduct of such person or any person affiliated therewith, (ii) by breach by such person or a related party of such person of the definitive documentation with respect to the

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	First Lien Bank Facilities or (iii) any claims of an Indemnified Person against any other Indemnified Person.
Yield Protection, Taxes and Other Deductions:	The First Lien Documentation will contain yield protection provisions, customary for facilities of this nature and consistent with documentation for transactions for companies owned by Sponsor, protecting the Lenders in the event of unavailability of LIBOR, breakage losses, reserve and capital adequacy requirements.
	All payments are to be free and clear of any present or future taxes, withholdings or other deductions whatsoever (other than income taxes in the jurisdiction of the Lender’s applicable lending office). The Lenders will use reasonable efforts to minimize to the extent possible any applicable taxes and Borrower will indemnify the Lenders and the Administrative Agent for such taxes paid by the Lenders or the Administrative Agent.
Requisite Lenders:	Lenders holding at least a majority of total loans and commitments under the First Lien Bank Facilities, with certain amendments requiring the consent of Lenders holding a greater percentage (or each Lender affected) of the total loans and commitments under the First Lien Bank Facilities (subject to a “yank-a-bank” provision), it being understood that amendments to financial definitions will require the consent of Lenders holding no more than a majority of total loans and commitments.
	The consent of each First Lien Lender directly and adversely affected thereby will be required with respect to (a) reductions in the amount or extensions of the scheduled date of final maturity of any loan or reductions or extensions of any amortization payment, (b) reductions in the rate of interest or any fee or extensions of any due date thereof, (c) modifications to any of the voting percentages and (d) increases in the amount or extensions of the expiry date of any First Lien Lender’s commitment and (ii) the consent of 100% of the First Lien Lenders will be required with respect to releases of all or substantially all of the collateral or all or substantially all of the guarantees other than in accordance with the provisions of the definitive documentation with respect to the First Lien Bank Facilities.
Governing Law and Forum:	The laws of the State of New York. Each party to the First Lien Documentation will waive the right to trial by jury and will consent to jurisdiction of the state and federal courts located in The City of New York.

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ANNEX III

SUMMARY OF PRINCIPAL TERMS AND CONDITIONS

Second Lien Term Loan Facility ³

Borrower:	A wholly owned subsidiary of Holdings that will, immediately following the Take-Out Closing Date, merge with and into Elk.
Holdings:	A wholly-owned subsidiary of Parent and the direct parent of Borrower.
Joint Lead Arrangers:	Banc of America Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated (the “Joint Lead Arrangers”).
Lenders:	A syndicate of banks, financial institutions and other entities, including Bank of America, N.A., Merrill Lynch Capital Corporation and General Electric Capital Corporation (collectively, the “Banks”), arranged by the Joint Lead Arrangers (together with the Banks, the “Lenders”); provided that any such syndication shall comply with the terms and conditions set forth in the Commitment Letter.
Administrative Agent and Collateral Agent:	Bank of America, N.A.
Syndication Agent:	Merrill Lynch Capital Corporation.
Documentation Agent:	General Electric Capital Corporation.
Type and Amount of Facilities:	Second Lien Term Loan Facility
	Second Lien Term Loan Facility (the “Second Lien Term Loan Facility,” and the loans thereunder, the “Second Lien Term Loans”) in an aggregate principal amount of $200.0 million.
	Incremental Facility:
	Borrower shall be entitled to incur additional term loans under the Second Lien Term Loan Facility or under a new second lien term loan facility to be included in the Second Lien Term Loan Facility (the “Additional Second Lien Term Loans”) in an aggregate principal amount of (when taken together with any Additional Facility Increase) up to $80.0 million and to have the same

³ All capitalized terms used but not defined herein shall have the meanings provided in the Commitment Letter to which this summary is attached.

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	guarantees as, and be secured on a pari passu basis by the same collateral securing, the Second Lien Term Loan Facility; provided that (i) no event of default or default exists or would exist after giving effect thereto, (ii) the maturity date of the Additional Second Lien Term Loans shall be no earlier than the maturity date of the Second Lien Term Loan Facility, (iii) the average life to maturity of the Additional Second Lien Term Loans shall be no shorter than the remaining average life to maturity of the Second Lien Term Loan Facility and (iv) the other terms and documentation in the respect thereof, to the extent not consistent with the Second Lien Term Loan Facility, shall otherwise be reasonably satisfactory to the Joint Lead Arrangers.
Purpose:	Proceeds of the Second Lien Term Loan Facility may be used on the Take-Out Closing Date to pay consideration in the Long Form Merger, to refinance the Tender Facility, redeem or repay the Interim Equity Financing, to effect the Refinancing and pay fees, commissions and expenses in connection with the foregoing and the Tender Offer Facility.
Take-Out Closing Date:	The date of funding of the Second Lien Term Loan Facility.
Definitive Documentation:	Consistent with recent transactions for companies owned by Sponsor. The Second Lien Documentation shall not contain any representation or warranty, affirmative or negative covenant or event of default not set forth in the Commitment Letter or the Annexes thereto, the accuracy, compliance or absence, respectively, of or with which would be a condition to the borrowing under the Second Lien Term Loan Facility. It is acknowledged and agreed that the Commitment Letter (including the annexes and exhibits hereto) sets forth the material terms of the Second Lien Documentation.
Maturity Dates:	Seven years and six months from the Take-Out Closing Date.
Availability:	A single drawing may be made on the Take-Out Closing Date of the full amount of the Second Lien Term Loan Facility.
Amortization:	The Second Lien Term Loan Facility will not be subject to interim amortization.
Interest:	At Borrower’s option, loans will bear interest based on the Base Rate or LIBOR (including with respect to borrowings on the Take-Out Closing Date), as described below:
	A. Base Rate Option
	Interest will be at the Base Rate plus the applicable Interest Margin, calculated on the basis of the actual number of days elapsed in a year of 365/66 days and payable quarterly in arrears. The Base Rate is defined as the higher of the Federal Funds Rate, as

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	published by the Federal Reserve Bank of New York, plus 1/2 of 1% and the prime commercial lending rate of the Administrative Agent for the Second Lien Term Loan Facility, as established from time to time at its principal U.S. office.
	Base Rate borrowings will require one business day’s prior notice and will be in minimum amounts to be agreed upon.
	B. LIBOR Option
	Interest will be determined for periods (“Interest Periods”) of one, two, three, six or, if available to all relevant Lenders, nine or twelve months (as selected by Borrower) and will be at an annual rate equal to the London Interbank Offered Rate (“LIBOR”) for the corresponding deposits of U.S. dollars, plus the applicable Interest Margin. LIBOR will be determined by the Administrative Agent at the start of each Interest Period and will be fixed through such period. Interest will be paid at the end of each Interest Period or, in the case of Interest Periods longer than three months, quarterly, and will be calculated on the basis of the actual number of days elapsed in a year of 360 days. LIBOR will be adjusted for maximum statutory reserve requirements (if any) consistent with documentation for recent transactions for companies owned by Sponsor.
	LIBOR borrowings will require three business days’ prior notice and will be in minimum amounts to be agreed upon.
Default Interest:	Upon the occurrence and during the continuance of a payment default, interest will accrue on any overdue amount of a loan or other overdue amount payable under the Second Lien Term Loan Facility at a rate of 2.0% per annum in excess of the rate (including the applicable Interest Margin) otherwise applicable to such loan or other amount and will be payable on demand.
Interest Margins:	The applicable Interest Margin will be the percentages set forth in the following table.

Base Rate			LIBOR
Loans			Loans
	5.25	%		6.25	%

Mandatory Prepayments: An amount equal to (a) 100% of the net cash proceeds received from specified sales or other dispositions of all or any part of the assets of Borrower or any of its restricted subsidiaries after the Take-Out Closing Date other than in the ordinary course and other than amounts reinvested in Borrower’s business within one year of the sale or other disposition (provided that if such amounts are committed to be reinvested within one year of such

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	sale or other disposition, such reinvestment period shall be extended by up to one additional year) and subject to other exceptions to be agreed and consistent with recent transactions for companies owned by Sponsor (including sales or other dispositions generating net cash proceeds not to exceed an amount to be agreed in any fiscal year), (b) 100% of the net cash proceeds received by Borrower or any of its restricted subsidiaries from the issuance of debt after the Take-Out Closing Date, other than debt permitted by the Second Lien Documentation and (c) beginning with the first full fiscal year of Borrower after the Take-Out Closing Date, 50% of excess cash flow of Borrower and its restricted subsidiaries (to be defined in a manner consistent with documentation for recent transactions for companies owned by Sponsor, but in any event to include deductions, without duplication among periods, for operating cash used to finance acquisitions and certain investments in amounts to be agreed and capital expenditures or then committed to be used to finance acquisitions, investments and capital expenditures for which a binding agreement then exists, subject to limitations to be agreed), with step-downs to (i) 25% if Borrower’s Total Leverage Ratio does not exceed 4.75:1.00 and (ii) 0% if Borrower’s Total Leverage Ratio is less than 4.00:1.00; provided that any voluntary prepayments of the First Lien Term Loans and mandatory prepayments of loans under the Revolving Credit Facility to the extent accompanied by permanent reductions of the commitments thereunder, other than prepayments funded with the proceeds of certain indebtedness, shall be credited against excess cash flow prepayment obligations on a dollar-for-dollar basis; provided, further, that (x) such mandatory prepayment provisions shall be no more restrictive than the corresponding provisions of the First Lien Documentation and (y) no such mandatory prepayments of loans under the Second Lien Term Loan Facility shall be made until amounts outstanding under the First Lien Term Loan Facility shall have been paid in full or unless such payment is otherwise permitted under the First Lien Documentation.
	There will be no prepayment penalties (except LIBOR breakage costs) for mandatory prepayments.
Optional Prepayments:	So long as no amounts are outstanding under the First Lien Term Loan Facility or such prepayment is otherwise permitted under the First Lien Documentation, permitted in whole or in part, with one business day’s prior notice in the case of Base Rate Loans and three business day’s prior notice in the case of LIBOR Loans, but without premium or penalty (except LIBOR breakage costs in the case of a prepayment other than on the last day of the relevant interest period and except as set forth under the caption “Call Protection” below) and including accrued and unpaid interest, subject to limitations as to minimum amounts of prepayments.

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Call Protection:	In the event all or any portion of the Second Lien Term Loan Facility is voluntarily prepaid or refinanced for any reason (other than in connection with an offer to purchase upon a Change of Control (to be defined in a manner consistent with documentation for recent high yield financings for companies owned by Sponsor)), or is otherwise prepaid with any Declined Amounts, in each case on or prior to the second anniversary of the Take-Out Closing Date, such prepayments shall be made at (i) 102.0% of the principal amount prepaid if such prepayment occurs on or prior to the first anniversary of the Take-Out Closing Date, and (ii) 101.0% of the principal amount prepaid if such prepayment occurs after the first anniversary of the Take-Out Closing Date but on or prior to the second anniversary of the Take-Out Closing Date.
Offer to Repay Upon a Change of Control:	Upon a Change of Control (to be defined in a manner consistent with documentation for recent high yield financings for companies owned by Sponsor), Borrower will offer to purchase all outstanding Second Lien Term Loans at a price equal to (i) 101.0% of the principal amount thereof if such purchase occurs on or prior to the second anniversary of the Take-Out Closing Date and (ii) 100.0% of the principal amount thereof if such purchase occurs after the second anniversary of the Take-Out Closing Date, in each case plus any accrued but unpaid interest, and subject to reimbursement of LIBOR breakage costs.
Guarantees:	The Second Lien Term Loan Facility will be fully and unconditionally guaranteed on a joint and several basis by Holdings and all of the existing and future direct and indirect material wholly-owned domestic subsidiaries of Borrower that provide guaranties under the First Lien Documentation, subject to exceptions to be agreed (collectively, the “Guarantors”). Certain subsidiaries may be designated and treated as “Unrestricted” on terms consistent with documentation for recent transactions for companies owned by Sponsor.
Security:	The Second Lien Term Loan Facility and the Guarantees will be secured on a second-priority basis by all the collateral securing the First Lien Bank Facilities (the “Collateral”).
Intercreditor Arrangements:	As set forth in Annex I to the Commitment Letter.
Conditions to Borrowing:	Subject to the second paragraph under “Conditions” in the Commitment Letter, conditions precedent to borrowing under the Second Lien Term Loan Facility will be those set forth under the heading “Conditions” in the Commitment Letter and in Section (B) of Annex IV to the Commitment Letter and the following: (1) the absence of any continuing default or event of default (other than breach of a representation which is not a condition to closing), (2) the accuracy in all material respects of representa-

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	tions and warranties that relate to the due authorization, execution, delivery, legality, validity, binding effect and enforceability of the Second Lien Documentation and (3) accuracy in all material respects of those representations and warranties set forth in the Merger Agreement (and referred to in the second paragraph under “Conditions” in the Commitment Letter) to the extent that you have the right to terminate your obligations under the Merger Agreement as a result of a breach of such representation or warranty in the Merger Agreement, which shall, on the Take-Out Closing Date only, constitute representations and warranties under the Second Lien Term Loan Facility.
Representations and Warranties:	The following representations and warranties will apply, subject to materiality thresholds and exceptions to be agreed and consistent with documentation for recent transactions for companies owned by Sponsor, to Borrower and its subsidiaries (other than, with respect to certain representations and warranties to be agreed, immaterial subsidiaries): financial statements (including pro forma financial statements); no material adverse change; corporate existence; compliance with material laws; corporate power and authority; enforceability of the Second Lien Documentation; no conflict with law or material contractual obligations; no material litigation; no default; ownership of property; absence of liens other than permitted liens; intellectual property; taxes; Federal Reserve regulations; ERISA; Investment Company Act; environmental matters; solvency; accuracy of disclosure; and creation and perfection of security interests.
Affirmative Covenants:	Consistent with documentation for recent transactions for companies owned by Sponsor and in any event not more restrictive than the affirmative covenants set forth in the First Lien Bank Term Sheet.
Negative Covenants:	Substantially similar to, and no more restrictive than, those set forth in the First Lien Bank Term Sheet with cushions from the First Lien Bank Facilities to be agreed upon.
Financial Covenants:	Senior Secured Leverage Ratio with set backs from the First Lien Bank Facilities to be agreed upon.
Events of Default:	Nonpayment, breach of representations and covenants, cross defaults, loss of significant lien on collateral, invalidity of significant guarantees, bankruptcy and insolvency events, ERISA events and judgments, in each case subject to grace periods, materiality thresholds and exceptions to be agreed and consistent with documentation for recent transactions for companies owned by Sponsor.
Assignments and Participations:	Each Lender may assign all or, subject to minimum amounts to be agreed, a portion of its loans and commitments under the Second Lien Term Loan Facility (other than to certain persons des-

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	ignated in writing by Borrower on or prior to the Take-Out Closing Date). Assignments will require the consent of the Administrative Agent and Borrower, which consents shall not be unreasonably withheld; provided that (i) no consents shall be required for an assignment to an existing Lender or an affiliate of an existing Lender and (ii) no consent of Borrower shall be required during the continuance of a payment or bankruptcy event of default. In addition, each Lender may sell participations in all or a portion of its loans and commitments under the Second Lien Term Loan Facility (other than to certain persons designated in writing by Borrower on or prior to the Take-Out Closing Date); provided that no purchaser of a participation shall have (a) the right to exercise or to cause the selling Lender to exercise voting rights in respect of the Second Lien Term Loan Facility (except as to certain customary issues) or (b) the right to yield protection in an amount exceeding that available to the relevant Lender.
Expenses and Indemnification:	All reasonable and documented out-of-pocket expenses (including but not limited to reasonable legal fees and expenses of not more than one counsel plus, if necessary, one local counsel per jurisdiction approved by Borrower) and expenses incurred in connection with due diligence and travel, courier, reproduction, printing and delivery expenses) of the Banks, the Joint Lead Arrangers, the Administrative Agent and the Collateral Agent associated with the syndication of the Second Lien Term Loan Facility and with the preparation, execution and delivery, administration, amendment, waiver or modification (including proposed amendments, waivers or modifications) of the documentation contemplated hereby are to be paid by Borrower on and after the Take-Out Closing Date, if it occurs. In addition, all reasonable and documented out-of-pocket expenses (including but not limited to reasonable legal fees and expenses of not more than one counsel plus, if necessary, one local counsel per jurisdiction approved by Borrower) of the Lenders and the Administrative Agent for workout proceedings and enforcement costs associated with the Second Lien Term Loan Facility are to be paid by Borrower.
	Borrower will indemnify the Lenders, the Joint Lead Arrangers, the Administrative Agent and the Collateral Agent and their respective affiliates, and hold them harmless from and against all reasonable and documented out-of-pocket costs, expenses (including but not limited to reasonable legal fees and expenses of not more than one counsel plus, if necessary, one local counsel per jurisdiction approved by the Borrower) and liabilities arising out of or relating to the transactions contemplated hereby and any actual or proposed use of the proceeds of any loans made under the Second Lien Term Loan Facility; provided, however, that no such person will be indemnified for costs, expenses or liabilities to the extent determined by a final judgment of a court of competent jurisdiction (or a settlement tantamount to such a

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	judgment) to have been incurred (i) by reason of the bad faith, gross negligence or willful misconduct of such person or any person affiliated therewith, (ii) by breach by such person or a related party of such person of the definitive documentation with respect to the Second Lien Term Loan Facility or (iii) any claims of an Indemnified Person against any other Indemnified Person.
Yield Protection, Taxes and Other Deductions:	The Second Lien Documentation will contain yield protection provisions, customary for facilities of this nature and consistent with documentation for transactions for companies owned by Sponsor, protecting the Lenders in the event of unavailability of LIBOR, breakage losses, reserve and capital adequacy requirements.
	All payments are to be free and clear of any present or future taxes, withholdings or other deductions whatsoever (other than income taxes in the jurisdiction of the Lender’s applicable lending office). The Lenders will use reasonable efforts to minimize to the extent possible any applicable taxes and Borrower will indemnify the Lenders and the Administrative Agent for such taxes paid by the Lenders or the Administrative Agent.
Requisite Lenders:	Lenders holding at least a majority of total loans and commitments under the Second Lien Term Loan Facility, with certain amendments requiring the consent of Lenders holding a greater percentage (or each Lender affected) of the total loans and commitments under the Second Lien Term Loan Facility (subject to a “yank-a-bank” provision), it being understood that amendments to financial definitions will require the consent of Lenders holding no more than a majority of total loans and commitments.
	The consent of each Second Lien Lender directly and adversely affected thereby will be required with respect to (a) reductions in the amount or extensions of the scheduled date of final maturity of any loan, (b) reductions in the rate of interest or any fee or extensions of any due date thereof, (c) modifications to any of the voting percentages and (d) increases in the amount or extensions of the expiry date of any Second Lien Lender’s commitment and (ii) the consent of 100% of the Second Lien Lenders will be required with respect to releases of all or substantially all of the collateral or all or substantially all of the guarantees other than in accordance with the provisions of the definitive documentation with respect to the Second Lien Term Loan Facility.
Governing Law and Forum:	The laws of the State of New York. Each party to the Second Lien Documentation will waive the right to trial by jury and will consent to jurisdiction of the state and federal courts located in The City of New York.

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ANNEX IV

CONDITIONS TO CLOSING⁴

          (A) The commitment of the Banks under the Commitment Letter and the agreements of the Joint Lead Arrangers to perform the services described in the Commitment Letter with respect to the Tender Facility are subject to the conditions set forth under “Conditions” in the Commitment Letter and Tender Term Sheet, and satisfaction or waiver of the conditions precedent set forth below, it being understood that there shall be no conditions to closing or the funding of the Tender Facility other than those expressly set forth under “Conditions” in the Commitment Letter and Tender Term Sheet: and those set forth below:

          1. Each purchase of Shares purchased pursuant to theTender Offer shall be consummated in accordance with the Merger Agreement without waiver or amendment of any material provisions thereof (other than any such waivers or amendments as are not, taken as a whole, materially adverse to the Banks or the Joint Lead Arrangers) unless consented to by the Joint Lead Arrangers, which consent shall not be unreasonably withheld, conditioned or delayed.

          2. As a condition to the availability of the Tender Facility, there shall have occurred (or shall occur substantially concurrently with the first acquisition of Shares in the Tender Offer), subject to clause (iii) of “Conditions” in the Commitment Letter, the execution and delivery by the Borrower and Holdings of definitive documentation (the “Tender Documentation”), including customary opinions, certificates and other closing documentation as the Joint Lead Arrangers shall reasonably request, with respect to the Tender Facility reflecting and consistent with the terms and conditions set forth herein and in Annex I or otherwise reasonably satisfactory to you and us.

          3. The Tender Facility Interest Support shall have been provided as described in the Commitment Letter.

          4. The Equity Financing shall have been made in the manner contemplated by the Commitment Letter.

          5. Borrower and the Guarantors shall have provided the documentation and other information to the Administrative Agent that is required by regulatory authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the Patriot Act.

¹ All capitalized terms used but not defined herein shall have the meanings provided in the Commitment Letter to which this Annex IV is attached.

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          (B) The commitment of the Banks under the Commitment Letter and the agreements of the Joint Lead Arrangers to perform the services described in the Commitment Letter with respect to the Take-Out Facilities are subject to the conditions set forth under “Conditions” in the Commitment Letter and Take-Out Term Sheets, and satisfaction or waiver of the conditions precedent set forth below, it being understood that there shall be no conditions to closing or the funding of the Take-Out Facilities other than those expressly set forth under “Conditions” in the Commitment Letter and Take-Out Term Sheets and those set forth below:

          1. The Joint Lead Arrangers shall have received reasonably satisfactory evidence that all loans outstanding under, and all other amounts due in respect of, all indebtedness for borrowed money of the Acquired Business or any of its subsidiaries, the Tender Facility and any subordinated indebtedness incurred in connection with the Interim Equity Financing shall have been repaid in full (or satisfactory arrangements made for such repayment) and the commitments thereunder shall have been permanently terminated, except for limited indebtedness to be agreed by the Joint Lead Arrangers.

          2. Unless the Short Form Merger shall have occurred, the Long Form Merger shall have been consummated or shall be consummated substantially simultaneously with or immediately following the first funding under the Take-Out Facilities in accordance with the Merger Agreement without waiver or amendment of any material provisions thereof (other than any such waivers or amendments as are not, taken as a whole, materially adverse to the Banks or the Joint Lead Arrangers) unless consented to by the Joint Lead Arrangers, which consent shall not be unreasonably withheld, conditioned or delayed.

          3. As a condition to the availability of the First Lien Bank Facilities, there shall have occurred (or shall occur substantially concurrently), subject to clause (iii) of “Conditions” in the Commitment Letter, the execution and delivery by the Borrower and Guarantors of definitive documentation consistent with recent transactions for companies owned by Sponsor (the “First Lien Documentation”), including customary opinions, certificates and other closing documentation as the Joint Lead Arrangers shall reasonably request, with respect to the First Lien Bank Facilities reflecting and consistent with the terms and conditions set forth herein and in Annex II or otherwise reasonably satisfactory to you and us.

          4. As a condition to the availability of the Second Lien Term Loan Facility, there shall have occurred (or shall occur substantially concurrently with the Acquisition and other Transactions), subject to clause (iii) of “Conditions” in the Commitment Letter, the execution and delivery by the Borrower and the Guarantors of definitive documentation consistent with recent transactions for companies owned by Sponsor (the “Second Lien Documentation”), including customary opinions, certificates and other closing documentation as the Joint Lead Arrangers shall reasonably request, with respect to the Second Lien Term Loan Facility reflecting and consistent with the terms and conditions set forth herein and in Annex III or otherwise reasonably satisfactory to you and us.

          5. Borrower and each of the Guarantors shall have provided the documentation and other information to the Administrative Agent that is required by regulatory authorities under applicable “know your customer” and anti-money-laundering rules and regulations, including, without limitation, the Patriot Act.

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ANNEX V

ADJUSTED EBITDA

“Adjusted EBITDA” means, for any period, Consolidated Net Income (as defined below) for such period plus (a) without duplication and to the extent deducted in determining such Consolidated Net Income, the sum of (i) consolidated interest expense for such period (net of interest income for such period), (ii) provision for taxes based on income, profits or capital of the Borrower and the Subsidiaries, including state, franchise and similar taxes and foreign withholding taxes paid or accrued during such period, (iii) all amounts attributable to depreciation and amortization for such period, (iv) non-cash charges (except to the extent representing accrual for future cash payments) for such period, including, without limitation, any non-cash compensation charge arising from any grant of stock, stock options or other equity-based awards and non-cash pension and post-employment benefit expenses, (v) extraordinary, non-recurring and unusual losses, charges and expenses, including, without limitation, any severance costs, costs associated with curtailments and modifications to pension and post-retirement employee benefit plans, costs associated with office openings or closings and consolidation, relocation or integration costs and other business optimization and restructuring charges and expenses (including with respect to acquisitions and investments after the date hereof regardless of whether or not such acquisitions or investments are consummated), provided that such charges or expenses are identified as nonrecurring and set forth in reasonable detail in a schedule to a certificate of a financial officer of the Borrower, (vi) any non-cash decrease in consolidated revenues during such period resulting from purchase accounting adjustments made in accordance with GAAP in connection with the Acquisition or any permitted acquisitions, (vii) to the extent actually reimbursed, expenses incurred to the extent covered by indemnification provisions in any agreement in connection with the Acquisition or a permitted acquisition, (viii) to the extent covered by insurance and actually reimbursed, expenses with respect to liability or casualty events or business interruption, (ix) fees and expenses of the Borrower and the Subsidiaries payable in connection with the issuance of equity interests, incurrence of indebtedness permitted under the definitive financing documentation or any permitted acquisition or other investment permitted under the definitive financing documentation (in each case whether or not successful), (x) management, monitoring, consulting and advisory fees and related expenses and any other fees and expenses (including Sponsor fees) (or any accruals relating to such fees and related expenses) paid pursuant to the definitive financing documentation up to a maximum amount to be agreed, (xi) any costs or expenses incurred by the Borrower or a Subsidiary pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such costs or expenses are funded with cash proceeds contributed to the capital of the Borrower or net cash proceeds of an issuance of equity interests of the Borrower (other than Disqualified Stock), (xii) cost-savings initiatives reflecting cost savings realizable in the six fiscal quarters following the Closing Date, provided that such cost savings calculations shall be made in good faith by a responsible financial or accounting officer of the Borrower and (xiii) charges and expenses in connection with the absorption of inventory in the 24 months following the Closing Date, provided that the amount of such charges and expenses are set forth in reasonable detail in a certificate to the Administrative Agent and do not exceed $10,000,000 in the aggregate, and minus (b) without duplication and to the extent included in determining such Consolidated Net Income, the sum of (i) any non-cash gains or other non-cash items of income (excluding, in each case, the accrual of revenue and the reversal of reserves) for such period (provided that any cash received in a subsequent period in respect of any such non-cash gain or other non-cash item of income shall be included in Adjusted EBITDA for the period in which received) and (ii) any increase in consolidated revenues during such period resulting from purchase accounting adjustments made in accordance with GAAP in connection with the Acquisition or any permitted acquisition.

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“Consolidated Net Income” means, for any period, the net income or loss of the Borrower and the Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided that: (a)(i) net income for such period of any person that is not a subsidiary of such person, or that is accounted for by the equity method of accounting, shall be included only to the extent of the amount of dividends or distributions paid in cash (or to the extent converted into cash) to the referent person or a subsidiary thereof in respect of such period, (ii) the net loss of any such person that is not a subsidiary of such person, or that is accounted for by the equity method of accounting, will be included only to the extent such loss is funded in cash by the Borrower or a Subsidiary during such period and (iii) the net income for such period shall include any ordinary course dividend distribution or other payment in cash received from any person in excess of the amounts included in clause (i); and (b) there shall be excluded (i) accruals and reserves that are established within twelve months after the Closing Date and that are so required to be established in accordance with GAAP; provided that any such accruals or reserves paid in cash shall be deducted from Consolidated Net Income for the period in which paid unless excluded pursuant to another clause of this definition; (ii) the income or loss of any person accrued prior to the date it becomes a Subsidiary or is merged into or consolidated with the Borrower or any Subsidiary or the date that such person’s assets are acquired by the Borrower or any Subsidiary; (iii) the cumulative effect of any change in accounting principles during such period; (iv) any gain or loss realized upon the sale or other disposition of any assets of the Borrower or its Subsidiaries that are not sold or otherwise disposed of in the ordinary course of business and any gain or loss realized upon the sale or other disposition of any equity interests of any person and any extraordinary gains or losses; (v) any non-cash SFAS 133 income (or loss) related to hedging activities; (vi) all deferred financing costs written off, premiums paid and other net gains or losses in connection with any early extinguishment of indebtedness; (vii) any non-cash impairment charges resulting from the application of SFAS Nos. 142 and 144 and the amortization of intangibles arising pursuant to SFAS No. 141; (viii) any non-cash expense or gain related to recording of the fair market value of swap agreements, in each case entered into in the ordinary course of business and not for speculative purposes; and (ix) unrealized gains and losses relating to hedging transactions and mark-to-market of indebtedness denominated in foreign currencies resulting from the application of SFAS 52.

“Senior Secured Leverage Ratio” means the ratio of (i) the total debt under the Facilities to (ii) Adjusted EBITDA for the four fiscal quarters most recently ended for which financial statements are available.

“Total Leverage Ratio” means the ratio of (i) the Borrower’s total net consolidated funded debt (to be defined in a manner consistent with syndicated financings for companies owned by Sponsor and net of unrestricted cash and cash equivalents) to (ii) Adjusted EBITDA for the four fiscal quarters most recently ended for which financial statements are available.

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EX-99.(D)(1)(A) 18 d42209exv99wxdyx1yxay.htm AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER

Exhibit (d)(1)(A)

AMENDED AND RESTATED

AGREEMENT AND PLAN OF MERGER

by and among

CGEA Holdings, Inc.,

CGEA Investor, Inc.

and

ElkCorp

Dated as of January 15, 2007

Table of Contents

	ARTICLE IA
	THE TENDER OFFER
Section 1A.1.	The Offer	2
Section 1A.2.	Company Action	3
Section 1A.3.	Directors	5
Section 1A.4.	Top-Up Option	6
	ARTICLE I
	THE MERGER
Section 1.1	The Merger	8
Section 1.2	Closing	8
Section 1.3	Effective Time	8
Section 1.4	Effects of the Merger	8
Section 1.5	Certificate of Incorporation and By-laws of the Surviving Corporation	8
Section 1.6	Directors	9
Section 1.7	Officers	9
Section 1.8	Merger Without Meeting of Stockholders	9
	ARTICLE II
	CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
Section 2.1	Effect on Capital Stock	9
Section 2.2	Exchange of Certificates	11
Section 2.3	Treatment of Stock Options and Other Stock-Based Awards	13
Section 2.4	Further Actions	13
	ARTICLE III
	REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1	Qualification, Organization, Subsidiaries, etc	14
Section 3.2	Capital Stock	15
Section 3.3	Subsidiaries; Investments	16
Section 3.4	Corporate Authority Relative to This Agreement; No Violation	16
Section 3.5	Reports and Financial Statements	17
Section 3.6	Internal Controls and Procedures	18
Section 3.7	No Undisclosed Liabilities	18
Section 3.8	Compliance with Law; Permits	19
Section 3.9	Environmental Laws and Regulations	19
Section 3.10	Employee Benefit Plans	20

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Section 3.11	Absence of Certain Changes or Events	22
Section 3.12	Investigations; Litigation	22
Section 3.13	Schedule 14D-9, Offer Documents; Proxy Statement; Other Information	23
Section 3.14	Other Approvals	23
Section 3.15	Tax Matters	24
Section 3.16	Labor Matters	25
Section 3.17	Intellectual Property	25
Section 3.18	Property	26
Section 3.19	Opinion of Financial Advisors	26
Section 3.20	Required Vote of the Company Stockholders	26
Section 3.21	Contracts	27
Section 3.22	Finders or Brokers	27
Section 3.23	Interested Party Transactions	27
Section 3.24	Insurance	28
Section 3.25	Customers and Suppliers	28
	ARTICLE IV
	REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Section 4.1	Qualification, Organization, Subsidiaries, etc	28
Section 4.2	Corporate Authority Relative to This Agreement; No Violation	29
Section 4.3	Investigations; Litigation	30
Section 4.4	Proxy Statement; Schedule 14D-9, Other Information	30
Section 4.5	Financing	30
Section 4.6	Guarantee	31
Section 4.7	Capitalization of Merger Sub	31
Section 4.8	No Vote of Parent Stockholders	31
Section 4.9	Finders or Brokers	31
Section 4.10	No Additional Representations	31
Section 4.11	Certain Arrangements	32
Section 4.12	HSR Filing	32
	ARTICLE V
	COVENANTS AND AGREEMENTS
Section 5.1	Conduct of Business by the Company and Parent	32
Section 5.2	Access	36
Section 5.3	No Solicitation	37
Section 5.4	Filings; Other Actions	39
Section 5.5	Employee Matters	40
Section 5.6	Efforts	41
Section 5.7	Takeover Statute	43
Section 5.8	Public Announcements	43
Section 5.9	Indemnification and Insurance	44

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Section 5.10	Control of Operations	46
Section 5.11	Financing	46
Section 5.12	Stockholder Litigation	48
Section 5.13	Notification of Certain Matters	48
Section 5.14	Private Placement Notes; Credit Agreement	49
	ARTICLE VI
	CONDITIONS TO THE MERGER
Section 6.1	Conditions to Each Party’s Obligation to Effect the Merger	50
	ARTICLE VII
	TERMINATION
Section 7.1	Termination or Abandonment	50
Section 7.2	Effect of Termination	52
Section 7.3	Termination Fees	52
	ARTICLE VIII
	MISCELLANEOUS
Section 8.1	No Survival of Representations and Warranties	55
Section 8.2	Expenses	55
Section 8.3	Counterparts; Effectiveness	55
Section 8.4	Governing Law	55
Section 8.5	Jurisdiction; Enforcement	55
Section 8.6	Waiver of Jury Trial	56
Section 8.7	Notices	56
Section 8.8	Assignment; Binding Effect	58
Section 8.9	Severability	58
Section 8.10	Entire Agreement; No Third-Party Beneficiaries	58
Section 8.11	Amendments; Waivers	58
Section 8.12	Headings	58
Section 8.13	Interpretation	59
Section 8.14	No Recourse	59
Section 8.15	Definitions	59

ANNEXES

Annex I — Financing Commitments
Annex II — Form of Guarantee
Annex III — Offer Conditions

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     AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of January 15, 2007 (this “Agreement”), among CGEA Holdings, Inc., a Delaware corporation (“Parent”), CGEA Investor, Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (“Merger Sub”), and ElkCorp, a Delaware corporation (the “Company”).

WITNESSETH:

     WHEREAS, the parties to this Agreement wish to amend and restate the Agreement and Plan of Merger, dated as of December 18, 2006 (the “Prior Merger Agreement”), by and among Parent, Merger Sub and the Company, as provided for herein.

     WHEREAS, on the terms and subject to the conditions set forth herein, Merger Sub has agreed to commence a tender offer (the “Offer”) to purchase all outstanding shares of common stock, par value $1.00 per share, of the Company, including the associated preferred stock purchase rights (the “Rights”) issued pursuant to the Rights Agreement, dated as of July 7, 1998 (as amended), between the Company and Mellon Investor Services, LLC, as Rights Agent (the “Rights Agreement”) (the shares of common stock, together with the Rights, are referred to collectively as the “Shares”), at a price of $40.50 per Share, net to the seller in cash (such price, or any higher price as may be paid in the Offer in accordance with this Agreement, the “Per Share Amount”).

     WHEREAS, following consummation of the Offer, Merger Sub shall merge with and into the Company (the “Merger”) and each Share that is issued and outstanding immediately prior to the Effective Time (as defined below) (other than Shares owned directly or indirectly by Parent, Merger Sub or the Company, which will be canceled with no consideration issued in exchange therefor) will be canceled and converted into the right to receive cash in an amount equal to the Per Share Amount, all upon the terms and conditions set forth herein.

     WHEREAS, the parties intend that the Company shall survive the Merger as a wholly owned subsidiary of Parent.

     WHEREAS, the board of directors of the Company (the “Board of Directors”), acting upon the recommendation of a special committee of independent directors of the Company (the “Special Committee”), has (i) determined that it is in the best interests of the Company and its stockholders, and declared it advisable, to enter into this Agreement, (ii) approved the execution, delivery and performance of this Agreement and (iii) determined to recommend that the Company’s stockholders accept the Offer and tender their Shares to Merger Sub and, to the extent applicable, to adopt this Agreement.

     WHEREAS, the board of directors of each of Parent and Merger Sub have approved this Agreement and declared it advisable for Parent and Merger Sub, respectively, to enter into this Agreement.

     WHEREAS, Parent, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements specified herein in connection with this Agreement.

     NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, Parent, Merger Sub and the Company agree as follows:

ARTICLE IA

THE TENDER OFFER

          Section 1A.1. The Offer.

     (a) Provided that this Agreement shall not have been terminated in accordance with Section 7.1, Merger Sub shall, and Parent shall cause Merger Sub to (i) as promptly as practicable following the execution of this Agreement, and in any event within three Business Days following the date of this Agreement (or such other later date as the parties may mutually agree in writing) commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) the Offer to purchase all outstanding Shares at the Per Share Amount. The Per Share Amount shall be net to the seller in cash, subject to reduction only for any applicable federal backup withholding or stock transfer taxes payable by the seller. The obligations of Merger Sub to, and of Parent to cause Merger Sub to, accept for payment and to pay for any Shares tendered pursuant to the Offer shall be subject to only those conditions set forth in Annex III (the “Tender Offer Conditions”). The Company agrees that no Shares held by the Company or any of its Subsidiaries (other than any Shares held on behalf of third parties) will be tendered pursuant to the Offer. For the avoidance of doubt, the parties hereto agree that Restricted Shares may be tendered in the Offer and be acquired by Parent or Merger Sub pursuant to the Offer.

     (b) Parent on behalf of Merger Sub expressly reserves the right from time to time, subject to Sections 1A.1(c) and (d), to waive any Tender Offer Condition or increase the Per Share Amount, provided that without the prior written consent of the Company, Merger Sub shall not, and Parent shall cause Merger Sub not to (i) decrease the Per Share Amount or change the form of consideration payable in the Offer, (ii) decrease the number of Shares sought to be purchased in the Offer, (iii) amend or waive satisfaction of the Minimum Condition (as defined in Annex III), (iv) impose additional conditions to the Offer, (v) make any change in the Offer that would require an extension or delay of the then-current Expiration Date (other than an increase in the Per Share Amount), (vi) modify or amend the Tender Offer Conditions (other

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than to waive such Tender Offer Conditions, other than the Minimum Condition) or (vii) modify or amend any other term of the Offer, in the case of this clause (vii), in any manner (A) adverse to the holders of Shares or (B) which would reasonably be expected to result in, individually or in the aggregate, a Parent Material Adverse Effect.

     (c) On the date of commencement of the Offer, Parent and Merger Sub shall file or cause to be filed with the SEC a Tender Offer Statement on Schedule TO (together with all amendments and supplements thereto, the “Schedule TO”) with respect to the Offer which shall contain the offer to purchase (the “Offer to Purchase”) and related letter of transmittal and summary advertisement and other ancillary Offer documents and instruments pursuant to which the Offer will be made (collectively with any supplements or amendments thereto, the “Offer Documents”). Parent, Merger Sub and the Company each agrees promptly to correct any information provided by it for use in the Offer Documents if and to the extent that it shall have become false or misleading in any material respect and Merger Sub shall, and Parent further agrees to cause Merger Sub to, take all steps necessary to cause the Schedule TO, as so corrected or supplemented, to be filed with the SEC and the Offer Documents, as so corrected or supplemented, to be disseminated to holders of Shares, in each case as and to the extent required by applicable Federal securities laws. The Company and its counsel shall be given a reasonable opportunity to review and comment on any Offer Documents (including each amendment or supplement thereto) before they are filed with the SEC. Merger Sub shall, and Parent agrees to cause Merger Sub to, provide the Company with (in writing, if written), and to consult with the Company regarding, any comments (written or oral) that may be received by Parent, Merger Sub or their counsel from the SEC or its staff with respect to the Offer Documents as promptly as practicable after receipt thereof. The Company and its counsel shall be given a reasonable opportunity to review any such written and oral comments and proposed responses.

     (d) The Offer to Purchase shall provide for an expiration date of the 20^th Business Day (as defined in Rule 14d-1 under the Exchange Act, “Business Day”) following (and including the day of) the commencement of the Offer (such date, or such subsequent date to which the expiration of the Offer is extended pursuant to and in accordance with the terms of this agreement, the “Expiration Date”). Merger Sub shall not and Parent agrees that it shall cause Merger Sub to not terminate or withdraw the Offer other than in connection with the effective termination of this Agreement in accordance with Section 7.1 hereof. Notwithstanding the foregoing, Merger Sub may, without Parent receiving the consent of the Company, (A) extend the Expiration Date for any period required by applicable rules and regulations of the SEC or the New York Stock Exchange applicable to the Offer or (B) elect to provide a subsequent offering period for the Offer in accordance with Rule 14d-11 under the Exchange Act. So long as the Offer and this Agreement have not been terminated pursuant to Section 7.1, if at any scheduled Expiration Date, the Tender Offer Conditions shall not have been satisfied or earlier waived, Merger Sub shall, and Parent shall cause Merger Sub to extend the Offer and the Expiration Date to a date that is not more than five Business Days after such previously scheduled Expiration Date; provided that Merger Sub shall not and Parent shall not be required to cause Merger Sub to extend the Offer beyond the End Date. In the event the Acceptance Date occurs but Parent does not acquire a sufficient number of Shares to enable a Short Form Merger to occur, Merger Sub shall, and Parent shall cause Merger Sub to provide a “subsequent offering period” for a number

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of days to be determined by Parent but not less than three nor more than 15 Business Days, in accordance with Rule 14d-11 under the Exchange Act; provided that Merger Sub shall, and Parent shall cause Merger Sub to immediately accept and promptly pay for all Shares tendered during the initial offering period and immediately accept and promptly pay for all Shares tendered during such subsequent offering period, in each case in accordance with Rule 14d-11 under the Exchange Act.

     (e) Subject solely to the satisfaction or waiver by Merger Sub in accordance with Section 1A.1(b) of the Tender Offer Conditions, Merger Sub shall, and Parent shall cause Merger Sub, as soon as possible after the expiration of the Offer, to accept for payment and pay for Shares validly tendered and not withdrawn pursuant to the Offer (the date of acceptance for payment, the “Acceptance Date”). Parent shall provide or cause to be provided to Merger Sub on a timely basis the funds necessary to purchase any Shares that Merger Sub becomes obligated to purchase pursuant to the Offer.

          Section 1A.2. Company Action.

     (a) The Board of Directors, acting upon the unanimous recommendation of the Special Committee, at a duly called and held meeting, has unanimously (with Thomas D. Karol and Richard A. Nowak abstaining) adopted resolutions: (i) determining that the terms of the Offer, the Merger and the other transactions contemplated by this Agreement are fair and in the best interests of the Company and its stockholders, and declaring it advisable, to enter into this Agreement; (ii) approving the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Offer and the Merger; (iii) approving the Recommendation; (iv) rendering the Rights and the limitations on business combinations contained in Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”) and in Article Thirteenth of the Company’s Restated Certificate of Incorporation inapplicable to the Offer, this Agreement and the transactions contemplated hereby; and (v) electing that the Offer and the Merger, to the extent of the Board of Directors’ power and authority and to the extent permitted by law, not to be subject to any “moratorium,” “control share acquisition,” “business combination,” “fair price” or other form of anti-takeover laws and regulations (collectively, “Takeover Laws”) of any jurisdiction that may purport to be applicable to this Agreement.

     (b) On the date the Offer Documents are filed with the SEC if practicable and otherwise reasonably promptly thereafter, the Company shall file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 (together with any amendments or supplements thereto, the “Schedule 14D-9”) that will comply in all material respects with the provisions of all applicable Federal securities laws. The Company agrees to use its commercially reasonable efforts to mail such Schedule 14D-9 to the stockholders of the Company along with the Offer Documents reasonably promptly after the commencement of the Offer. Subject to any Change of Recommendation in accordance with this Agreement, the Schedule 14D-9 and the Offer Documents shall contain the Recommendation. The Company agrees reasonably promptly to correct the Schedule 14D-9 if and to the extent that it shall

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become false or misleading in any material respect (and each of Parent and Merger Sub, with respect to written information supplied by it specifically for use in the Schedule 14D-9, shall promptly notify the Company of any required corrections of such information and cooperate with the Company with respect to correcting such information) and to supplement the information contained in the Schedule 14D-9 to include any information that shall become necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Company shall use reasonable best efforts to cause the Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to the Company’s stockholders to the extent required by applicable Federal securities laws. Parent and its counsel shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 before it is filed with the SEC. The Company shall provide Parent and Merger Sub (in writing, if written), and consult with Parent and Merger Sub regarding, any comments the Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 as promptly as practicable after receipt of such comments.

     (c) In connection with the Offer, the Company shall reasonably promptly following execution of this Agreement furnish Parent with mailing labels containing the names and addresses of all record holders of Shares, non-objecting beneficial owners list and security position listings of Shares held in stock depositories, each as of a recent date, and shall reasonably promptly furnish Parent with such additional information, including updated lists of stockholders, mailing labels, security position listings and computer files, and such other information and assistance as Merger Sub or its agents may reasonably request for the purpose of communicating the Offer to the record and beneficial holders of Shares.

     Section 1A.3. Directors. Promptly upon the payment by Parent or Merger Sub for all Shares tendered pursuant to the Offer which represent at least a majority of the Shares outstanding, and from time to time thereafter as Shares are acquired by Parent or Merger Sub, Parent shall be entitled to designate such number of directors, rounded up to the next whole number, on the Board of Directors as will give Parent, subject to compliance with Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, representation on the Board of Directors equal to at least that number of directors which equals the product of the total number of directors on the Board of Directors (giving effect to the directors appointed or elected pursuant to this sentence and including current directors serving as officers of the Company) multiplied by the percentage that the aggregate number of Shares beneficially owned by Parent or any affiliate of Parent (including for purposes of this Section 1A.3 such Shares as are accepted for payment pursuant to the Offer, but excluding Shares held by the Company or any of its Subsidiaries) bears to the number of Shares outstanding; provided, however, that, in the event that Parent’s designees are appointed or elected to the Board of Directors, until the Effective Time (as defined in Section 1.3 hereof) the Board of Directors shall have at least three directors who are directors on the date hereof and who are neither officers of the Company nor designees, stockholders, affiliates or associates (within the meaning of the Federal securities laws) of Parent (one or more of such directors, the “Independent Directors”); provided further, that if there are in office fewer than three Independent Directors, the Board of Directors will take all action necessary to cause a person or, if there are two vacancies, two persons designated by the remaining Independent Director(s) to fill such vacancy(ies) who shall be neither an officer of the

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Company nor a designee, stockholder, affiliate or associate of Parent, and such person shall be deemed to be an Independent Director for purposes of this Agreement, or, if no Independent Directors remain, the other directors shall designate three persons to fill the vacancies who shall be neither an officer of the Company nor a designee, stockholder, affiliate or associate of Parent, and each such person shall be deemed to be an Independent Director for purposes of this Agreement. At each such time, the Company will, subject to any limitations imposed by applicable law or New York Stock Exchange rules, also cause (a) each committee of the Board of Directors, (b) if requested by Parent, the board of directors of each of the Subsidiaries and (c) if requested by Parent, each committee of such board of directors of each of the Subsidiaries to include persons designated by Parent constituting the same percentage of each such committee or board as Parent’s designees constitute on the Board of Directors. The Company shall, upon request by Parent, subject to the Company’s Certificate of Incorporation, promptly increase the size of the Board of Directors or exercise its best efforts to secure the resignations of such number of directors as is necessary to enable Parent’s designees to be elected to the Board of Directors in accordance with the terms of this Section 1A.3 and shall cause Parent’s designees to be so elected. Subject to applicable law, the Company shall promptly take all action necessary pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order to fulfill its obligations under this Section 1A.3 and shall include in the Schedule 14D-9 mailed to stockholders promptly after the commencement of the Offer (or an amendment thereof or an information statement pursuant to Rule 14f-1 if Parent has not complied with its obligation to supply the Company the information required by Section 14(f) and Rule 14-f-1 at least two Business Days in advance of the date the Schedule 14D-9 is to be filed with the SEC) such information with respect to the Company and its officers and directors as is required under Section 14(f) and Rule 14f-1 in order to fulfill its obligations under this Section 1A.3. Parent will supply the Company any information with respect to itself and its nominees, officers, directors and affiliates required by Section 14(f) and Rule 14f-1. Notwithstanding anything in this Agreement to the contrary, following the time directors designated by Parent are elected or appointed to the Board of Directors and prior to the Effective Time, the affirmative vote of a majority of the Independent Directors shall be required to (v) authorize any agreement between the Company and any of its subsidiaries, on the one hand, and Parent, Merger Sub and any of their affiliates (other than the Company and any of its subsidiaries) on the other hand, (w) amend or terminate this Agreement on behalf of the Company, (x) exercise or waive any of the Company’s rights or remedies hereunder, (y) extend the time for performance of Parent’s or Merger Sub’s obligations hereunder or (z) take any other action by the Company in connection with this Agreement or the transactions contemplated hereby required to be taken by the Board of Directors. The Independent Directors shall have the authority to retain such counsel (which may include current counsel to the Company) and other advisors at the expense of the Company as determined appropriate by the Independent Directors and shall have the authority to institute any action on behalf of the Company to enforce the performance of this Agreement.

          Section 1A.4. Top-Up Option.

     (a) The Company hereby grants to Parent and Merger Sub an irrevocable option (the “Top-Up Option”) to purchase, at a price per share equal to the Per Share Amount, a number of Shares (the “Top-Up Option Shares”) that, when added to the number of Shares owned by Parent

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or Merger Sub or any wholly-owned Subsidiary of Parent or Merger Sub at the time of exercise of the Top-Up Option, constitutes one Share more than 90% of the number of Shares that will be outstanding immediately after the issuance of the Top-Up Option Shares. The Top-Up Option shall be exercised by Parent or Merger Sub, in whole or in part, at any time on or after the expiration date of the Offer and on or prior to the fifth Business Day after the later of (1) the expiration date of the Offer or (ii) the expiration of any subsequent offering period; provided, however, that the obligation of the Company to deliver Top-Up Option Shares upon the exercise of the Top-Up Option is subject to the conditions that (A) the number of Top-Up Option Shares to be issued by the Company shall in no event exceed 19.90% of the number of outstanding Shares or the voting power of the Company, in each case, as of immediately prior to and after giving effect to the issuance of the Top-Up Option Shares, (B) no provision of any applicable law and no judgment, injunction, order or decree shall prohibit the exercise of the Top-Up Option or the delivery of the Top-Up Option Shares in respect of such exercise, (C) the issuance of Top-Up Option Shares pursuant to the Top-Up Option would not require approval of the Company’s stockholders under applicable law or regulation (including, without limitation, New York Stock Exchange rules and regulations, (D) upon exercise of the Top-Up Option, the number of Shares owned by Parent or Merger Sub or any wholly-owned Subsidiary of Parent or Merger Sub constitutes one Share more than 90% of the number of Shares that will be outstanding immediately after the issuance of the Top-Up Option Shares, and (E) Merger Sub has accepted for payment and paid for all Shares validly tendered in the Offer and not withdrawn. The parties shall cooperate to ensure that the issuance of the Top-Up Option Shares is accomplished consistent with all applicable legal requirements of all Governmental Entities, including compliance with an applicable exemption from registration of the Top-Up Option Shares under the Securities Act. The Top-Up Option shall be exercised (and may only be exercised) if following its exercise, the condition set forth in clause (D) above would be satisfied.

     (b) Upon the exercise of the Top-Up Option in accordance with Section 1A.4(a), Parent shall so notify the Company and shall set forth in such notice (i) the number of Shares that are expected to be owned by Parent, Merger Sub or any wholly-owned Subsidiary of Parent or Merger Sub immediately preceding the purchase of the Top-Up Option Shares and (ii) a place and time for the closing of the purchase of the Top-Up Option Shares. The Company shall, as soon as practicable following receipt of such notice, notify Parent and Merger Sub of the number of Shares then outstanding and the number of Top-Up Option Shares. At the closing of the purchase of the Top-Up Option Shares, Parent or Merger Sub, as the case may be, shall pay the Company the aggregate price required to be paid for the Top-Up Option Shares, and the Company shall cause to be issued to Parent or Merger Sub a certificate representing the Top-Up Option Shares. The aggregate purchase price payable for the Top-Up Shares may be paid by Merger Sub or Parent by executing and delivering to the Company a promissory note having a principal amount equal to the balance of the aggregate purchase price for the Top-Up Shares. Any such promissory note shall bear interest at the rate of interest per annum equal to the Interest Rate, shall mature on the first anniversary of the date of execution and delivery of such promissory note and may be prepaid without premium or penalty. In the event that this Agreement is terminated after the Top-Up Option is exercised and prior to the Effective Time, all amounts then owing pursuant to the promissory note (including all interest) shall thereupon become immediately due and payable.

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ARTICLE I

THE MERGER

     Section 1.1 The Merger. On the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, at the Effective Time, Merger Sub will merge with and into the Company, whereupon the separate corporate existence of Merger Sub will cease, and the Company will continue its corporate existence under Delaware law as the surviving corporation in the Merger (the “Surviving Corporation”) and a wholly owned subsidiary of Parent.

     Section 1.2 Closing. The closing of the Merger (the “Closing”) shall take place at the offices of Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York 10022 at 10:00 a.m., local time, on a date (the “Closing Date”) which shall be the second Business Day after the satisfaction or waiver (to the extent permitted by applicable Law) of the conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied by actions to be taken at the Closing, but subject to the satisfaction or waiver of such conditions), or at such other place, date and time as the Company and Parent may agree in writing; provided, however, that if, as of or immediately following the Acceptance Date, the expiration of any subsequent offering period pursuant to Section 1A.1(d), or the exercise of the Top-Up Option, a Short Form Merger is available pursuant to Section 1.8 and Section 253 of the DGCL, the Closing shall, subject to the satisfaction or waiver of the conditions set forth in Section 6.1, occur no later than the Business Day immediately following the Acceptance Date, the expiration of such subsequent offering period or the closing of the purchase of the Top-Up Option Shares, as applicable.

     Section 1.3 Effective Time. Subject to the provisions of this Agreement, at the Closing, the Company will cause a certificate of merger (the “Certificate of Merger”) to be executed, acknowledged and filed with the Secretary of State of the State of Delaware in accordance with Section 251 of the DGCL (or to the extent provided in Section 1.8 hereof, Section 253 of the DGCL). The Merger will become effective at such time as the Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware or at such later date or time as may be agreed by the Company and Merger Sub in writing and specified in the Certificate of Merger in accordance with the DGCL (the effective time of the Merger being hereinafter referred to as the “Effective Time”).

     Section 1.4 Effects of the Merger. The Merger shall have the effects set forth in this Agreement and the applicable provisions of the DGCL.

     Section 1.5 Certificate of Incorporation and By-laws of the Surviving Corporation. Subject to Section 5.9, at the Effective Time, (a) the certificate of incorporation of the Surviving Corporation shall be amended to read in its entirety as the certificate of incorporation of Merger Sub read immediately prior to the Effective Time, except that the name of the Surviving Corporation shall be Elk Corporation or ElkCorp and the provision in the certificate of incorporation of Merger Sub naming its incorporator shall be omitted, and (b) the by-laws of the Surviving Corporation shall be amended so as to read in their entirety as the by-laws of Merger Sub as in effect immediately prior to the Effective Time, until thereafter amended in accordance

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with applicable Law, except that the references to Merger Sub’s name shall be replaced by references to Elk Corporation or ElkCorp.

     Section 1.6 Directors. Subject to applicable Law, the directors of Merger Sub as of the Effective Time shall be the initial directors of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

     Section 1.7 Officers. The officers of the Company as of the Effective Time shall be the initial officers of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

     Section 1.8 Merger Without Meeting of Stockholders. Notwithstanding anything in this Agreement to the contrary, but subject to Section 6.1, if, following the Offer and any subsequent offering period and the exercise, if any, of the Top-Up Option, Parent, or any direct or indirect Subsidiary of Parent shall own at least 90% of the outstanding Shares, pursuant to the Offer, exercise of the Top-Up Option or otherwise, the parties hereto shall, subject to Article VI hereof, take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the satisfaction of such threshold, without a meeting of stockholders of the Company, in accordance with Section 253 of the DGCL (such Merger, a “Short Form Merger”).

ARTICLE II

CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES

     Section 2.1 Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Merger Sub or the holders of any securities of the Company or Merger Sub:

     (a) Conversion of Shares. Each Share outstanding immediately prior to the Effective Time, other than Shares to be cancelled pursuant to Section 2.1(b) and other than Dissenting Shares, shall be converted automatically into and shall thereafter represent the right to receive in cash an amount equal to the Per Share Amount (the “Merger Consideration”). All Shares that have been converted into the right to receive the Merger Consideration as provided in this Section 2.1 shall be automatically cancelled and shall cease to exist, and the holders of certificates which immediately prior to the Effective Time represented such Shares shall cease to have any rights with respect to such Shares other than the right to receive the Merger Consideration and the right to receive any then unpaid dividend or other distribution with respect to such Shares having a record date before the Effective Time.

     (b) Parent and Merger Sub-Owned Shares. Each Share that is owned, directly or indirectly, by Parent or Merger Sub immediately prior to the Effective Time or held by the Company immediately prior to the Effective Time (in each case, other than any such Shares held on behalf of third parties) (the “Cancelled Shares”) shall by virtue of the Merger and without any action on the part of the holder thereof, be cancelled and retired and shall cease to exist, and no consideration shall be delivered in exchange for such cancellation and retirement.

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     (c) Conversion of Merger Sub Common Stock. At the Effective Time and by virtue of the Merger and without any action on the part of the holder thereof, each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving Corporation. From and after the Effective Time, all certificates representing the common stock of Merger Sub shall be deemed for all purposes to represent the number of shares of common stock of the Surviving Corporation into which they were converted in accordance with the immediately preceding sentence.

     (d) Dissenters’ Rights. Any provision of this Agreement to the contrary notwithstanding, if required by the DGCL (but only to the extent required thereby), Shares that are issued and outstanding immediately prior to the Effective Time (other than Cancelled Shares) and that are held by holders of such Shares who have not voted in favor of the adoption of this Agreement or consented thereto in writing and who are entitled to demand and who have properly exercised appraisal rights with respect thereto in accordance with, and who have complied with, Section 262 of the DGCL (the “Dissenting Shares”) will not be converted into the right to receive the Merger Consideration, but instead holders of such Dissenting Shares will be entitled to receive payment of the appraised value of such Dissenting Shares in accordance with the provisions of such Section 262 unless and until any such holder fails to perfect or effectively withdraws or loses its rights to appraisal and payment under the DGCL. If, after the Effective Time, any such holder fails to perfect or effectively withdraws or loses such right, such Dissenting Shares will thereupon be treated as if they had been converted into and have become exchangeable for, at the Effective Time, the right to receive the Merger Consideration, without any interest thereon, and the Surviving Corporation shall remain liable for payment of the Merger Consideration for such Shares. At the Effective Time, any holder of Dissenting Shares shall cease to have any rights with respect thereto, except the rights provided in Section 262 of the DGCL and as provided in the previous sentence. The Company will give Parent (i) prompt notice of any demands received by the Company for appraisals of Shares, attempted withdrawals of such demands and any other instruments served pursuant to the DGCL and received by the Company relating to stockholders’ rights of appraisal and (ii) the opportunity to participate in all negotiations and proceedings with respect to such notices and demands. The Company shall not, except with the prior written consent of Parent, voluntarily make any payment with respect to any demands for appraisal or settle, or offer to agree to settle, any such demands.

     (e) Adjustments. If at any time during the period between the date of this Agreement and the Effective Time, any change in the outstanding shares of capital stock of the Company, or securities convertible or exchangeable into or exercisable for shares of capital stock, shall occur as a result of any reclassification, recapitalization, stock split (including a reverse stock split) or subdivision or combination, exchange or readjustment of shares, or any stock dividend or stock distribution with a record date during such period (excluding, in each case, normal quarterly cash dividends), merger or other similar transaction, the Merger Consideration shall be equitably adjusted to reflect such change; provided that nothing herein shall be construed to permit the Company to take any action with respect to its securities that is prohibited by the terms of this Agreement.

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     Section 2.2 Exchange of Certificates.

     (a) Paying Agent. At or prior to the earlier of the Acceptance Date or the Effective Time, Parent shall deposit, or shall cause to be deposited, with a U.S. bank or trust company that shall be appointed by Parent, and approved in advance by the Company in writing (such approval not to be unreasonably withheld) to act as a paying agent hereunder (and pursuant to an agreement in form and substance reasonably acceptable to Parent and the Company) (the “Paying Agent”), in trust for the benefit of holders of the Shares, the Company Stock Options and the Performance Shares, cash in U.S. dollars sufficient to pay (i) the aggregate Merger Consideration in exchange for all of the Shares outstanding immediately prior to the Effective Time (other than the Cancelled Shares), payable upon due surrender of the certificates that immediately prior to the Effective Time represented Shares (“Certificates”) (or effective affidavits of loss in lieu thereof) or non-certificated Shares represented by book-entry (“Book-Entry Shares”) pursuant to the provisions of this Article II and (ii) the Option and Stock-Based Consideration payable pursuant to Section 2.3 (such cash referred to in subsections (a)(i) and (a)(ii) being hereinafter referred to as the “Exchange Fund”).

     (b) Payment Procedures.

          (i) As soon as reasonably practicable after the Effective Time and in any event not later than the third Business Day following the Closing Date, the Paying Agent shall mail (x) to each holder of record of Shares whose Shares were converted into the Merger Consideration pursuant to Section 2.1, (A) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to Certificates shall pass, only upon delivery of Certificates (or effective affidavits of loss in lieu thereof) or Book- Entry Shares to the Paying Agent and shall be in such form and have such other provisions as Parent and the Company may mutually agree), and (B) instructions for use in effecting the surrender of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares in exchange for the Merger Consideration and (y) to each holder of a Company Stock Option or a Performance Share, a check in an amount due and payable to such holder pursuant to Section 2.3 hereof in respect of such Company Stock Option or Performance Share.

          (ii) Upon surrender of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares to the Paying Agent together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may customarily be required by the Paying Agent, the holder of such Certificates or Book-Entry Shares shall be entitled to receive in exchange therefor a check in an amount equal to the product of (x) the number of Shares represented by such holder’s properly surrendered Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares and (y) the Merger Consideration. No interest will be paid or accrued on any amount payable upon due surrender of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares. In the event of a transfer of ownership of Shares that is not registered in the transfer records of the Company, a check for any cash to be paid upon due surrender of the Certificate may be paid to such a transferee if the Certificate formerly representing such Shares is presented to the Paying Agent,

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accompanied by all documents required to evidence and effect such transfer and to evidence that any applicable stock transfer Taxes have been paid or are not applicable.

          (iii) Parent, Merger Sub, the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable under this Agreement (whether pursuant to the Offer, the Merger or otherwise) to any holder of Shares (including, for the avoidance of doubt, Restricted Shares) or holder of Company Stock Options or Performance Shares, such amounts as are required to be withheld or deducted under the Internal Revenue Code of 1986, as amended (the “Code”), the rules and regulations promulgated thereunder, or any provision of U.S. state or local Tax Law with respect to the making of such payment. To the extent that amounts are so withheld or deducted and paid over to the applicable Governmental Entity, such withheld or deducted amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Shares or holder of the Company Stock Options or Performance Shares, in respect of which such deduction and withholding were made.

     (c) Closing of Transfer Books. At the Effective Time, the stock transfer books of the Company shall be closed, and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the Shares that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation or Parent for transfer, they shall be cancelled and exchanged for a check in the proper amount pursuant to this Article II.

     (d) Termination of Exchange Fund. Any portion of the Exchange Fund (including the proceeds of any investments thereof) that remains undistributed to the former holders of Shares for one year after the Effective Time shall be delivered to Surviving Corporation upon demand, and any former holders of Shares who have not surrendered their Shares in accordance with this Section 2.2 shall thereafter look only to the Surviving Corporation for payment of their claim for the Merger Consideration, without any interest thereon, upon due surrender of their Shares.

     (e) No Liability. Anything herein to the contrary notwithstanding, none of the Company, Parent, Merger Sub, the Surviving Corporation, the Paying Agent or any other person shall be liable to any former holder of Shares for any amount properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

     (f) Investment of Exchange Fund. The Paying Agent shall invest all cash included in the Exchange Fund as reasonably directed by Parent; provided, however, that any investment of such cash shall be limited to direct short-term obligations of, or short-term obligations fully guaranteed as to principal and interest by, the U.S. government. Any interest and other income resulting from such investments shall be paid to the Surviving Corporation pursuant to Section 2.2(d) .

     (g) Lost Certificates. In the case of any Certificate that has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by the Paying Agent, the posting by such person of a bond in customary amount as indemnity against any claim that may be made against it with

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respect to such Certificate, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate a check in the amount of the number of Shares represented by such lost, stolen or destroyed Certificate multiplied by the Merger Consideration.

     Section 2.3 Treatment of Stock Options and Other Stock-Based Awards.

     (a) Except as otherwise agreed in writing by Parent and the applicable holder thereof, each option to purchase Shares (collectively, the “Company Stock Options”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time will at the Effective Time be cancelled and the holder of such Company Stock Option will, in full settlement of such Company Stock Option, receive from the Surviving Corporation an amount (subject to any applicable withholding tax) in cash equal to the product of (x) the excess, if any, of the Merger Consideration over the exercise price per Share of such Company Stock Option multiplied by (y) the total number of Shares subject to such Company Stock Option (the aggregate amount of such cash hereinafter referred to as the “Option Consideration”).

     (b) Except as otherwise agreed in writing by Parent and the applicable holder thereof, immediately prior to the Effective Time, each award of restricted common stock granted under the Company Stock Plans (the “Restricted Shares”) shall vest in full and be converted into the right to receive the Merger Consideration as provided in Section 2.1(a) .

     (c) Except as otherwise agreed in writing by Parent and the applicable holder thereof, at the Effective Time, each performance share based on Shares granted under the Company Stock Plans (the “Performance Shares”), whether vested or unvested, which is outstanding immediately prior to the Effective Time shall be deemed to be earned at the level set forth in the applicable Company Stock Plan and applicable award agreement, shall become fully vested and shall entitle the holder thereof to receive, at the Effective Time or, with respect to Shares issuable with respect to Performance Shares that the applicable holder has validly elected to defer on or prior to December 31, 2006, such later date as the applicable holder shall have validly elected, an amount in cash equal to the Merger Consideration in respect of each Share earned with respect to the Performance Shares (subject to any applicable withholding taxes) (the aggregate amount of such cash, together with the Option Consideration, hereinafter referred to as the “Option and Stock-Based Consideration”).

     (d) Prior to the Effective Time, the Company will adopt such resolutions as may reasonably be required in its discretion to effectuate the actions contemplated by this Section 2.3.

     Section 2.4 Further Actions. The Company has taken on or prior to December 31, 2006 any and all action reasonably necessary to permit the deferral of receipt of Shares in respect of Performance Shares pursuant to the deferral elections made by the applicable holders on or prior to December 31, 2006, and the Company shall take or cause to be taken on or prior to the Effective Time any and all additional action reasonably necessary, including by amending the Company Stock Plans, to permit the exchange of Company Stock Options, Restricted Shares or Performance Shares for Parent equity awards pursuant to the agreements between Parent and the applicable holder of a Company Stock Option, Restricted Share or Performance Share referred to

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in Section 2.3, in each case to the extent consistent with such plans, agreements and applicable Law.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except (i) as disclosed in the Company SEC Documents filed on or after June 30, 2006 and prior to the date hereof (excluding any disclosures set forth in any risk factor section thereof or in any section relating to or containing forward looking statements) or (ii) as disclosed in the amended and restated disclosure schedule delivered by the Company to Parent immediately prior to the execution of this Agreement (the “Company Disclosure Letter”, it being agreed that disclosure of any item in any section of the Company Disclosure Letter shall also be deemed disclosure with respect to any other section of this Agreement to which the relevance of such item is reasonably apparent on its face), the Company represents and warrants to Parent and Merger Sub as follows:

     Section 3.1 Qualification, Organization, Subsidiaries, etc.

     (a) Each of the Company and its Subsidiaries is a legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization. Each of the Company and its Subsidiaries has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted and is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to have such power or authority, would not have, individually or in the aggregate, a Company Material Adverse Effect.

     (b) Each of the Company and its Subsidiaries is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Company Material Adverse Effect. The organizational or governing documents of the Company and each of its Subsidiaries, as previously provided to Parent, are in full force and effect.

     (c) As used in this Agreement, any reference to any fact, circumstance, event, change, effect or occurrence having a “Company Material Adverse Effect” means any fact, circumstance, event, change, effect or occurrence that has or would be reasonably likely to have a material adverse effect on the business, results of operation or financial condition of the Company and its Subsidiaries, taken as a whole, but, in any case, shall not include facts, circumstances, events, changes, effects or occurrences (i) generally affecting the industries in which the Company and its Subsidiaries operate (including general pricing changes), or the economy or the financial or securities markets in the United States or elsewhere in the world (including any regulatory and political conditions or developments, or any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism), except to the extent any fact, circumstance, event, change,

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effect or occurrence that, relative to other industry participants, disproportionately impacts the assets, properties, business, results of operation or financial condition of the Company and its Subsidiaries, taken as a whole, (ii) resulting from the announcement of (A) the proposal of the Offer and Merger or (B) this Agreement and the transactions contemplated hereby or (iii) resulting from any litigation related to this Agreement or the transactions contemplated hereby brought by shareholders of the Company; and provided that any failure to meet internal or published projections, forecasts or revenue or earning predictions for any period shall not, in and of itself, constitute a Company Material Adverse Effect.

     Section 3.2 Capital Stock.

     (a) The authorized share capital of the Company consists of 100,000,000 Shares and 1,000,000 shares of preferred stock (the “Preferred Stock”). As of January 12, 2007, there were (i) 20,626,102 Shares issued and outstanding (including 128,501 unvested Restricted Shares granted under the 2004 Amended and Restated ElkCorp Equity Incentive Compensation Plan (the “2004 Plan”) and the 2002 ElkCorp Equity Incentive Compensation Plan (the “2002 Plan”) and no shares of Preferred Stock issued and outstanding, (ii) Company Stock Options granted under the 2004 Plan, the 2002 Plan, the Elcor Corporation 1998 Amended and Restated Incentive Stock Option Plan (the “1998 Plan”), and the Elcor Corporation 1993 Incentive Stock Option Plan (the “1993 Plan”), collectively, to purchase an aggregate of 1,338,365 Shares, with a weighted average exercise price of $24.06 per share, issued and outstanding, (iii) 581,700 shares subject to outstanding Performance Share awards (at the maximum 150% Target level) and (iv) 66,007 Shares available for future awards under the 2004 Plan. Other than Company Stock Options granted under the 2004 Plan, the 2002 Plan, the 1998 Plan, and the 1993 Plan, and unvested Restricted Shares granted under the 2002 Plan and the 2004 Plan, there are no Company Stock Options, and no unvested Restricted Shares issued and outstanding. All outstanding Shares are duly authorized, validly issued, fully paid and non-assessable, and are not subject to and were not issued in violation of any preemptive or similar right, purchase option, call or right of first refusal or similar right.

     (b) Except as set forth in subsection (a) above, as of the date hereof, (i) the Company does not have any shares of its capital stock issued or outstanding other than Shares that have become outstanding after January 12, 2007, which were reserved for issuance as of January 12, 2007 as set forth in subsection (a) above, and (ii) except as set forth in the Rights Agreement, there are no outstanding subscriptions, options, warrants, calls, convertible securities or other similar rights, agreements or commitments relating to the issuance of capital stock to which the Company or any of the Company’s Subsidiaries is a party obligating the Company or any of the Company’s Subsidiaries to (A) issue, transfer or sell any shares of capital stock or other equity interests of the Company or any Subsidiary of the Company or securities convertible into or exchangeable for such shares or equity interests, (B) grant, extend or enter into any such subscription, option, warrant, call, convertible securities or other similar right, agreement or arrangement, (C) redeem or otherwise acquire any such shares of capital stock or other equity interests, or (D) provide a material amount of funds to, or make any material investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary. Except for the issuance of Shares that were available for issuance as set forth in subsection (a) above, and except for regular quarterly cash dividends as publicly disclosed, from December 15, 2006 to the date hereof, the Company has not declared or paid any dividend or distribution in respect of the Shares, and has

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not issued, sold, repurchased, redeemed or otherwise acquired any Shares, and its Board of Directors has not authorized any of the foregoing.

     (c) Neither the Company nor any of its Subsidiaries has outstanding bonds, debentures, notes or, other than as referred to in Sections 3.2(a) and 3.2(b), other securities, the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.

     (d) There are no stockholder agreements, voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party with respect to the voting of the capital stock or other equity interest of the Company or any of its Subsidiaries.

     Section 3.3 Subsidiaries; Investments.

     (a) Section 3.3 of the Company Disclosure Letter sets forth a complete and correct list of each “significant subsidiary” of the Company as such term is defined in Regulation S-X promulgated by the SEC (each, a “Significant Subsidiary”). Section 3.3 of the Company Disclosure Letter also sets forth the jurisdiction of organization and percentage of outstanding equity interests (including partnership interests and limited liability company interests) owned by the Company or its Subsidiaries of each Significant Subsidiary. All equity interests (including partnership interests and limited liability company interests) of the Company’s Significant Subsidiaries held by the Company or any other Subsidiary have been duly and validly authorized and are validly issued, fully paid and non-assessable and were not issued in violation of any preemptive or similar rights, purchase option, call or right of first refusal or similar rights. All such equity interests owned by the Company or its Subsidiaries are free and clear of any Liens, other than restrictions imposed by applicable Law.

     (b) Except as set forth in Section 3.3 of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries owns any shares of capital stock or other equity interests in (including any securities exercisable or exchangeable for or convertible into capital stock or other voting or equity interests in) any other Person.

     Section 3.4 Corporate Authority Relative to This Agreement; No Violation.

     (a) The Company has requisite corporate power and authority to enter into this Agreement and, subject to receipt of the Company Stockholder Approval, to consummate the transactions contemplated hereby. The Board of Directors, acting upon the unanimous recommendation of the Special Committee, at a duly called and held meeting, has unanimously (with Thomas D. Karol and Richard A. Nowak abstaining) adopted resolutions (i) determining that the terms of the Offer, the Merger and the other transactions contemplated by this Agreement are fair and in the best interests of the Company and its stockholders, and declaring it advisable, to enter into this Agreement, (ii) approving the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Offer and the Merger, and (iii) resolving to recommend that the stockholders of the Company tender their Shares in the Offer or otherwise approve the adoption of this Agreement (the “Recommendation”) and directing that to the extent required by the DGCL this Agreement and the Merger be submitted for consideration of the stockholders of the Company at the Company

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Meeting. Except for the Company Stockholder Approval and the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, no other corporate proceedings on the part of the Company are necessary to authorize the consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and, assuming this Agreement constitutes the valid and binding agreement of Parent and Merger Sub, constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms.

     (b) The execution, delivery and performance by the Company of this Agreement and the consummation of the Merger by the Company do not and will not require any consent, approval, authorization or permit of, action by, filing with or notification to any United States or foreign governmental or regulatory agency, commission, court, body, entity or authority (each, a “Governmental Entity”), other than (i) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware in accordance with the DGCL, (ii) compliance with the applicable requirements of the Exchange Act, including the filing of the Schedule 14D-9 in connection with the Offer and the Proxy Statement, if applicable, in connection with the Company Stockholder Approval, (iii) compliance with the rules and regulations of the New York Stock Exchange, and (iv) compliance with any applicable foreign or state securities or blue sky laws (collectively, clauses (i) through (iv), the “Specified Approvals”), and other than any consent, approval, authorization, permit, action, filing or notification the failure of which to make or obtain would not (A) individually or in the aggregate, have a Company Material Adverse Effect or (B) prevent or materially delay the consummation of the Offer or the Merger.

     (c) Assuming compliance with the matters referenced in Section 3.4(b), receipt of the Specified Approvals and the receipt of the Company Stockholder Approval, the execution, delivery and performance by the Company of this Agreement, the consummation by Parent of the Offer and the consummation by the Company of the Merger and the other transactions contemplated hereby do not and will not (i) contravene or conflict with the organizational or governing documents of the Company or any of its Subsidiaries, (ii) contravene or conflict with or constitute a violation of any provision of any Law binding upon or applicable to the Company or any of its Subsidiaries or any of their respective properties or assets, or (iii) result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any material obligation or to the loss of a material benefit under any loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, lease, agreement, contract, instrument, permit, concession, franchise, right or license binding upon the Company or any of its Subsidiaries or result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of the Company or any of its Subsidiaries, other than, in the case of clauses (ii) and (iii), any such violation, conflict, default, termination, cancellation, acceleration, right, loss or Lien that would not have, individually or in the aggregate, a Company Material Adverse Effect.

     Section 3.5 Reports and Financial Statements.

     (a) The Company has filed or furnished all forms, documents, statements and reports required to be filed or furnished prior to the date hereof by it with the SEC since June 30, 2004 (the forms, documents, statements and reports filed with the SEC since June 30, 2004 and those filed with the SEC subsequent to the date of this Agreement, if any, including any amendments

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thereto, the “Company SEC Documents”). As of their respective dates, or, if amended, as of the date of the last such amendment prior to the date hereof, the Company SEC Documents complied, and each of the Company SEC Documents filed subsequent to the date of this Agreement will comply, in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as the case may be, and the applicable rules and regulations promulgated thereunder. None of the Company SEC Documents so filed or that will be filed subsequent to the date of this Agreement contained or will contain, as the case may be, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

     (b) The consolidated financial statements (including all related notes and schedules) of the Company included in the Company SEC Documents (if amended, as of the date of the last such amendment) fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries, as at the respective dates thereof, and the consolidated results of their operations and their consolidated cash flows for the respective periods then ended (subject, in the case of the unaudited statements, to normal year-end audit adjustments and to any other adjustments described therein, including the notes thereto) in conformity with GAAP (except, in the case of the unaudited statements, as permitted by the SEC) applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto).

     Section 3.6 Internal Controls and Procedures. The Company has established and maintains disclosure controls and procedures and internal controls over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act. The Company’s disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. The Company’s management has completed an assessment of the effectiveness of the Company’s internal controls over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act for the year ended June 30, 2006, and such assessment concluded that such controls were effective. The Company has disclosed, based on its most recent evaluations, to the Company’s outside auditors and the audit committee of the Company (A) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect in any material respect the Company’s ability to record, process, summarize and report financial data and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.

     Section 3.7 No Undisclosed Liabilities. Except (a) as reflected or reserved against in the Company’s consolidated balance sheets (or the notes thereto) included in the Company SEC Documents filed after June 30, 2006 and prior to the date hereof, (b) as expressly permitted or

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contemplated by this Agreement, (c) for liabilities and obligations incurred in the ordinary course of business consistent with past practice since June 30, 2006 and (d) for liabilities or obligations which have been discharged or paid in full in the ordinary course of business, neither the Company nor any Subsidiary of the Company has any liabilities or obligations of any nature, whether or not accrued, contingent or otherwise, whether known or unknown and whether due or to become due, that would, individually or in the aggregate, have a Company Material Adverse Effect.

     Section 3.8 Compliance with Law; Permits.

     (a) The Company and each of the Company’s Subsidiaries are in compliance with and are not in default under or in violation of any applicable federal, state, local or foreign law, statute, ordinance, rule, regulation, judgment, order, injunction, decree or agency requirement of any Governmental Entity (collectively, “Laws” and each, a “Law”), except where such non-compliance, default or violation would not have, individually or in the aggregate, a Company Material Adverse Effect. Anything contained in this Section 3.8(a) to the contrary notwithstanding, no representation or warranty shall be deemed to be made in this Section 3.8(a) in respect of the matters referenced in Section 3.5 or 3.6, or in respect of environmental or labor Law matters, each of which matters is addressed by other sections of this Agreement.

     (b) The Company and the Company’s Subsidiaries are in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Entity necessary for the Company and the Company’s Subsidiaries to own, lease and operate their properties and assets or to carry on their businesses as they are now being conducted (the “Company Permits”), except where the failure to have any of the Company Permits would not have, individually or in the aggregate, a Company Material Adverse Effect. All Company Permits are in full force and effect, except where the failure to be in full force and effect would not have, individually or in the aggregate, a Company Material Adverse Effect. No suspension or cancellation of any of the Company Permits is pending or threatened, except where such suspension or cancellation would not, individually or in the aggregate, have a Company Material Adverse Effect. The Company and its Subsidiaries are not, and since December 31, 2004 have not been, in violation or breach of, or default under, any Company Permit, except where such violation, breach or default would not, individually or in the aggregate, have a Company Material Adverse Effect. As of the date of this Agreement, to the knowledge of the Company, no event or condition has occurred or exists which would result in a violation of, breach, default or loss of a benefit under, or acceleration of an obligation of the Company or any of its Subsidiaries under, any Company Permit (in each case, with or without notice or lapse of time or both), except for violations, breaches, defaults, losses or accelerations that would not, individually or in the aggregate, have a Company Material Adverse Effect.

     Section 3.9 Environmental Laws and Regulations. Except as would not, individually or in the aggregate, have a Company Material Adverse Effect, (i) the Company and its Subsidiaries have conducted their respective businesses in compliance with all applicable Environmental Laws (as hereinafter defined), (ii) there has been no release of any Hazardous Substance by the Company or any of its Subsidiaries in any manner that could reasonably be expected to give rise to any remedial obligation or corrective action requirement under applicable Environmental Laws, (iii) neither the Company nor any of its Subsidiaries has

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received any written notices, demand letters or written requests for information from any Governmental Entity alleging that the Company or any of its Subsidiaries is in violation of, or liable under, any Environmental Law, (iv) to the Company’s knowledge no Hazardous Substance has been disposed of, released or transported in violation of any applicable Environmental Law, or in a manner giving rise to any liability under Environmental Law, from any properties while owned or operated by the Company or any of its Subsidiaries as a result of any operations or activities of the Company or its Subsidiaries, (v) neither the Company, or its Subsidiaries nor any of their respective properties are subject to any liabilities relating to any suit, settlement, court order, administrative order, regulatory requirement, judgment or written claim asserted or arising under any Environmental Law or any agreement relating to environmental liabilities and (vi) to the knowledge of the Company, neither the Company nor any of its Subsidiaries has ever manufactured asbestos-containing materials.

     (a) As used herein, “Environmental Law” means any Law relating to (i) the protection, preservation or restoration of the environment (including air, water vapor, surface water, groundwater, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), or (ii) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of Hazardous Substances, in each case as in effect at the date hereof.

     (b) As used herein, “Hazardous Substance” means any substance listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous under any Environmental Law. Hazardous Substance includes any substance to which exposure is regulated by any Governmental Entity or any Environmental Law including any toxic waste, pollutant, contaminant, hazardous substance, toxic substance, hazardous waste, special waste, industrial substance or petroleum or any derivative or byproduct thereof, radon, radioactive material, asbestos or asbestos containing material, urea formaldehyde, foam insulation or polychlorinated biphenyls.

     (c) The generality of any other representations and warranties in this Agreement notwithstanding, this Section 3.9 shall be deemed to contain the only representations and warranties in this Agreement with respect to Environmental Law, Hazardous Substances and any other environmental matter.

     Section 3.10 Employee Benefit Plans.

     (a) Section 3.10(a) of the Company Disclosure Letter lists all “multiemployer plans” within the meaning of 4001(a)(3) of ERISA (each a “Multiemployer Plan”) to which the Company or its Subsidiaries contributes, Company Benefit Plans that are employee welfare plans within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), any employee pension benefit plan within the meaning of Section 3(2) of ERISA and all other material Company Benefit Plans (whether or not such plan is subject to ERISA). “Company Benefit Plans” means all employee or director compensation and/or benefit plans, programs, policies, agreements or other arrangements, including any employee welfare plan within the meaning of Section 3(1) of ERISA, any employee pension benefit plan within the meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA), and any bonus, incentive, deferred compensation, vacation, stock purchase, stock option, severance,

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employment, change of control or fringe benefit plan, program, agreement or arrangement (other than any Multiemployer Plan and any other plan, program or arrangement maintained by an entity other than the Company or any of its Subsidiaries pursuant to any collective bargaining agreements), in each case that are sponsored, maintained or contributed to by the Company or any of its Subsidiaries for the benefit of current or former employees, directors or consultants of the Company or its Subsidiaries. It is agreed and understood that no representation or warranty is made in respect of ERISA matters in any Section of this Agreement other than this Section 3.10 and Section 3.16.

     (b) The Company has heretofore made available to Parent true and complete copies of each of the material Company Benefit Plans (or with respect to unwritten plans, a written description thereof) and material related documents, including plan documents, trust agreements and other funding arrangements, but not limited to, (i) each writing constituting a part of such Company Benefit Plan, including all amendments thereto; (ii) the three most recent Annual Reports (Form 5500 Series) and accompanying schedules, if any; (iii) the most recent determination letter from the IRS (if applicable) for such Company Benefit Plan and (iv) all material communications received from or sent to the IRS, the Pension Benefit Guaranty Corporation or the Department of Labor and any schedules thereto.

     (c) (i) Each Company Benefit Plan has been maintained and administered in compliance with its terms and with applicable Law, including but not limited to ERISA and the Code to the extent applicable thereto, (ii) each of the Company Benefit Plans intended to be “qualified” within the meaning of Section 401(a) of the Code has received a favorable determination letter from the IRS or is entitled to rely upon a favorable opinion issued by the IRS, and, to the knowledge of the Company, there are no existing circumstances or any events that have occurred that could reasonably be expected to adversely affect the qualified status of any such plan; (iii) no Company Benefit Plan is subject to Title IV of ERISA; (iv) no Company Benefit Plan provides retiree medical or other welfare benefits, other than (A) coverage mandated by applicable Law or (B) benefits under any “employee pension plan”; (v) no liability under Title IV of ERISA has been incurred by the Company, its Subsidiaries or any ERISA Affiliate of the Company that has not been satisfied in full; (vi) all contributions or other amounts payable by the Company or its Subsidiaries as of the date hereof with respect to each Company Benefit Plan in respect of current or prior plan years have been paid or accrued in accordance with GAAP (other than with respect to amounts not yet due); (vii) neither the Company nor its Subsidiaries has engaged in a transaction in connection with which the Company or its Subsidiaries reasonably could be subject to either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a material tax imposed pursuant to Section 4975 or 4976 of the Code; and (viii) there are no pending, threatened or, to the knowledge of the Company, anticipated claims (other than claims for benefits in accordance with the terms of the Company Benefit Plans) by, on behalf of or against any of the Company Benefit Plans or any trusts related thereto which could reasonably be expected to result in any liability of the Company or any of its Subsidiaries except in the case of clauses (i), (vi) and (viii) as would not have, individually or in the aggregate, a Company Material Adverse Effect. “ERISA Affiliate” means, with respect to any entity, trade or business, any other entity, trade or business that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes the first entity, trade or business, or that is a member of the same “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.

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     (d) Neither the Company nor any of its Subsidiaries has, at any time during the last six years, contributed to or been obligated to contribute to any Multiemployer Plan other than as set forth on Section 3.10(d) of the Company Disclosure Letter.

     (e) The consummation of the transactions contemplated by this Agreement will not, either alone or in combination with another event, (i) entitle any current or former employee, consultant, officer or director of the Company or any of its Subsidiaries to severance pay, unemployment compensation or any other payment, except as expressly provided in Section 2.3 hereto, (ii) result in any payment becoming due, accelerate the time of payment or vesting, or increase the amount of compensation due to any such employee, consultant, officer or director, except as expressly provided in Section 2.3 hereof, (iii) result in any forgiveness of indebtedness, trigger any funding obligation under any Company Benefit Plan or impose any restrictions or limitations on the Company’s rights to administer, amend or terminate any Company Benefit Plan, or (iv) result in any payment that could reasonably be construed, individually or in combination with any other such payment, to constitute an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code), in each case except as set forth in Section 3.10(e) of the Company Disclosure Letter. Except as set forth in the Executive Agreements listed in Section 3.10(e) of the Company Disclosure Letter, no person is entitled to receive any additional payment (including, without limitation, any tax gross up or other payment) from the Company or any of its Subsidiaries or any other person as a result of the imposition of the excise tax required by Section 4999(a) of the Code.

     (f) Each “nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of the Code) of the Company has been operated since January 1, 2005 in good faith compliance with Section 409A of the Code, the proposed regulations thereunder, IRS Notice 2005-1, Notice 2005-91, Notice 2006-33, Notice 2006-79 and Notice 2006-100. Each Stock Option has been granted with an exercise price no lower than “fair market value” (within the meaning of Section 409A and 422 of the Code) as of the grant date of such option.

     Section 3.11 Absence of Certain Changes or Events. Since June 30, 2006 through the date of this Agreement, (a) except as otherwise expressly contemplated or required by this Agreement, the businesses of the Company and its Subsidiaries have been conducted, in all material respects, in the ordinary course of business consistent with past practice and there have not been any facts, circumstances, events, changes, effects or occurrences that have had or would have, individually or in the aggregate, a Company Material Adverse Effect and (b) neither the Company nor any of its Subsidiaries has taken or agreed to take any action that would be prohibited by clauses (v), (vi), (vii), (xi), (xvi) or (xvii) of Section 5.1(b) .

     Section 3.12 Investigations; Litigation. As of the date hereof, there are no (a) investigations or proceedings pending (or, to the knowledge of the Company, threatened) by any Governmental Entity with respect to the Company or any of its Subsidiaries or (b) actions, suits or proceedings pending (or, to the knowledge of the Company, threatened) against or affecting the Company or any of its Subsidiaries, or any of their respective properties at law or in equity before, to the Company’s knowledge, and there are no orders, judgments or decrees of any Governmental Entity against the Company or any of its Subsidiaries, in each case of clause (a) or (b), which would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

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     Section 3.13 Schedule 14D-9, Offer Documents; Proxy Statement; Other Information.

     (a) None of the information supplied or to be supplied in writing by or on behalf of the Company specifically for inclusion in the Offer Documents will, at the times such documents are filed with the SEC and are mailed to stockholders of the Company, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, or necessary to correct any statement supplied by the Company made in any communication with respect to the Offer previously filed with the SEC or disseminated to the stockholders of the Company. The Schedule 14D-9 will not, at the time the Schedule 14D-9 is filed with the SEC and at all times prior to the purchase of Shares by Merger Sub pursuant to the Offer, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation or warranty is made by the Company with respect to information supplied in writing by Parent, Merger Sub or an Affiliate of Parent or Merger Sub which is contained in the Schedule 14D-9. The Schedule 14D-9 will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations of the SEC thereunder.

     (b) The proxy statement (including the letter to stockholders, notice of meeting and form of proxy, the “Proxy Statement”) that may be filed by the Company with the SEC in connection with seeking the adoption of this Agreement by the stockholders of the Company will not, at the time it is filed with the SEC, or at the time it is first mailed to the stockholders of the Company or at the time of the Company Meeting, and at the time of any amendments or supplements thereto, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Company will cause the Proxy Statement to comply as to form in all material respects with the requirements of the Exchange Act applicable thereto as of the date of such filing. No representation is made by the Company with respect to statements made in the Proxy Statement based on information supplied, or required to be supplied, by Parent, Merger Sub or any of their affiliates specifically for inclusion or incorporation by reference therein.

     Section 3.14 Other Approvals.

     (a) Rights Plan. The Second Amendment to Rights Agreement, dated as of December 18, 2006, by and between the Company and the Rights Agent remains in full force and effect.

     (b) Section 203: Article Thirteenth. The Board of Directors has resolved to, and the Company after the execution of this Agreement will, take all action necessary to render the limitations on business combinations contained in Section 203 of the DGCL and in Article Thirteenth of the Company’s Restated Certificate of Incorporation inapplicable to this Agreement and the transactions contemplated hereby. Neither the execution and delivery of this Agreement nor the consummation of the Offer, the Merger and any of the transactions

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contemplated hereby will prohibit for any period of time, or impose any stockholder approval requirement with respect to, the Merger.

     Section 3.15 Tax Matters. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect:

     (a) the Company and each of its Subsidiaries have prepared and duly and timely filed (taking into account any extension of time within which to file) all Tax Returns required to be filed by any of them and all such filed Tax Returns are complete and accurate in all respects;

     (b) the Company and each of its Subsidiaries have duly and timely paid all Taxes that are required to be paid by any of them (whether or not shown as due on such Tax Return);

     (c) there are not pending, outstanding or threatened in writing, any audits, examinations, investigations or other proceedings in respect of Taxes of the Company or any of its Subsidiaries;

     (d) no deficiency with respect to Taxes has been proposed, asserted or assessed in each case, in writing, against the Company or any of its Subsidiaries;

     (e) there are no requests for rulings or determinations in respect of any material Taxes or material Tax Returns pending between the Company or any of its Subsidiaries on the one hand and any authority responsible for such Taxes or Tax Returns on the other;

     (f) the Company and each of its Subsidiaries has timely withheld and paid all Taxes required to be withheld and paid in connection with amounts paid or owing to any employee, creditor, independent contractor, shareholder or other third party and is in compliance with all applicable rules and regulations regarding the solicitation, collection and maintenance of any forms, certifications and other information required in connection therewith;

     (g) neither the Company nor any of its Subsidiaries has any liability as a result of being a party to any Tax sharing, Tax indemnity or other agreement or arrangement relating to Taxes (other than an agreement or arrangement solely among members of an affiliated, consolidated or unitary group the common parent of which is the Company or which includes only the Company and/or its Subsidiaries);

     (h) neither the Company nor any of its Subsidiaries has any liability for Taxes as a result of having been a member of any affiliated group within the meaning of Section 1504(a) of the Code, or any similar affiliated or consolidated group for Tax purposes under state, local or foreign law (other than a group the common parent of which is the Company or which includes only the Company and/or its Subsidiaries), or has any liability for the Taxes of any person (other than the Company and its Subsidiaries) under Treasury Regulations Section 1.1502 -6 or any similar provision of state, local or foreign law, or as a transferee or successor, or otherwise;

     (i) neither the Company nor any of its Subsidiaries has been a “controlled corporation” or a “distributing corporation” in any distribution that was purported or intended to be governed by Section 355 of the Code within the two-year period ending on the date hereof; and

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     (j) neither the Company nor any of its Subsidiaries has entered into any “listed transaction” within the meaning of Treasury Regulation Section 1.6011 -4(b)(2).

     As used in this Agreement, (i) “Taxes” means any and all domestic or foreign, federal, state, local or other taxes, charges, fees, imposts, levies or other assessments of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Entity, including taxes on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, unemployment, social security, workers’ compensation or net worth, and taxes in the nature of excise, withholding, ad valorem or value added and (ii) “Tax Return” means any return, report or similar filing (including the attached schedules, supplements and additional or supporting material) filed or required to be filed with respect to Taxes, including any information return, claim for refund, amended return or declaration of estimated Taxes (and including any amendments with respect thereto). It is agreed and understood that no representation or warranty is made in respect of Tax matters in any Section of this Agreement other than this Section 3.15.

     Section 3.16 Labor Matters. Except for such matters which would not have, individually or in the aggregate, a Company Material Adverse Effect, (a) as of the date hereof, (i) there are no strikes or lockouts with respect to any employees of the Company or any of its Subsidiaries (“Employees”), (ii) to the knowledge of the Company, there is no union organizing effort pending or threatened against the Company or any of its Subsidiaries, (iii) there is no unfair labor practice, labor dispute (other than routine individual grievances) or labor arbitration proceeding pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries, and (iv) there is no slowdown, or work stoppage in effect or, to the knowledge of the Company, threatened with respect to Employees, (b) the Company and its Subsidiaries are in compliance with all applicable Laws respecting (i) employment and employment practices, (ii) terms and conditions of employment and wages and hours and (iii) unfair labor practices and (c) neither the Company nor any of its Subsidiaries has any liabilities under the Worker Adjustment and Retraining Act of 1998 (the “WARN Act”) as a result of any action taken by the Company (other than at the written direction of Parent or as a result of any of the transactions contemplated hereby). Except for such matters which would not have, individually or in the aggregate, a Company Material Adverse Effect, neither the Company nor any of its Subsidiaries has received written notice during the past two years of the intent of any Governmental Entity responsible for the enforcement of labor, employment, occupational health and safety or workplace safety and insurance/workers compensation laws to conduct an investigation of the Company or any of its Subsidiaries and, to the knowledge of the Company, no such investigation is in progress. It is agreed and understood that no representation or warranty is made in respect of labor matters in any Section of this Agreement other than Section 3.10 and this Section 3.16.

     Section 3.17 Intellectual Property. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, either the Company or a Subsidiary of the Company owns, or is licensed or otherwise possesses legally enforceable rights to use, all material trademarks, trade names, service marks, service names, mark registrations, logos, assumed names, registered and unregistered copyrights, patents or applications and registrations

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used in their respective businesses as currently conducted (collectively, the “Intellectual Property”). Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, (a) there are no pending or, to the knowledge of the Company, threatened claims by any person alleging infringement by the Company or any of its Subsidiaries for their use of the Intellectual Property of the Company or any of its Subsidiaries (b) to the knowledge of the Company, the conduct of the business of the Company and its Subsidiaries does not infringe any intellectual property rights of any person, (c) neither the Company nor any of its Subsidiaries has made any claim of a violation or infringement by others of its rights to or in connection with the Intellectual Property of the Company or any of its Subsidiaries and (iv) to the knowledge of the Company, no person is infringing any Intellectual Property of the Company or any of its Subsidiaries.

     Section 3.18 Property. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, the Company or a Subsidiary of the Company owns and has good and indefeasible title to all of its owned real property and good title to all its personal property and has valid leasehold interests in all of its leased properties free and clear of all Liens (except for Permitted Liens, and except for title exceptions, defects, liens, charges, restrictions, encumbrances, restrictive covenants and other matters, whether or not of record, which in the aggregate do not materially affect the continued use of the property for the purposes for which the property is currently being used (assuming the timely discharge of all obligations owing under or related to the owned real property, the personal property and the leased property) by the Company or a Subsidiary of the Company), sufficient to conduct their respective businesses as currently conducted. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, all leases under which the Company or any of its Subsidiaries leases any real or personal property are valid and effective against the Company or any of its Subsidiaries and there is not, under any of such leases, any existing default by the Company or any of its Subsidiaries, to the Company’s Knowledge, the counterparties thereto, or, to the Company’s knowledge, any event, fact or circumstance which, with notice or lapse of time or both, would become a default by the Company or any of its Subsidiaries or, to the Company’s knowledge, the counterparties thereto.

     Section 3.19 Opinion of Financial Advisors. The Special Committee has received the oral opinion, to be confirmed in writing, of Citigroup Global Markets Inc. (“Citigroup”), the Special Committee’s financial advisor, to the effect that, as of the date of such opinion and based upon and subject to the factors and assumptions set forth in such opinion, the consideration to be received in the Offer and the Merger, taken together, by holders of Shares (other than Parent, Merger Sub and their respective Affiliates) is fair, from a financial point of view, to such holders, and the Board of Directors has received the oral opinion, to be confirmed in writing, of UBS Securities LLC (“UBS”), the Board of Directors’ financial advisor, to the effect that, as of the date of such opinion, and based upon and subject to the factors and assumptions set forth in such opinion, the consideration to be received in the Offer and the Merger, taken together by holders of Shares (other than Parent, Merger Sub and their respective Affiliates) is fair, from a financial point of view, to such holders.

     Section 3.20 Required Vote of the Company Stockholders. The affirmative vote of the holders of a majority of the outstanding Shares is the only vote or consent of holders of securities

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of the Company which may be required to approve this Agreement and the transactions contemplated hereby, including the Merger (the “Company Stockholder Approval”).

     Section 3.21 Contracts.

     (a) Except as set forth in Section 3.21 of the Company Disclosure Letter or as filed with the SEC, as of the date hereof neither the Company nor any of its Subsidiaries is a party to or bound by, as of the date hereof, any Contract (whether written or oral) (i) which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) to the Company; (ii) which constitutes a contract or commitment relating to indebtedness for borrowed money or the deferred purchase price of property (in either case, whether incurred, assumed, guaranteed or secured by any asset) in excess of $1,000,000; (iii) which is a customer or supply agreement providing for the receipt or expenditure of more than $300,000 on an annual basis; or (iv) which contains any provision that prior to or following the Effective Time would materially restrict or alter the conduct of business of, or purport to materially restrict or alter the conduct of business of, whether or not binding on, Parent or any Affiliate of the Parent (other than the Company, any of its Subsidiaries or any director, officer or employee of any of the Company or any of its Subsidiaries) (all contracts of the type described in this Section 3.21(a) (other than clause (iv)) being referred to herein as “Company Specified Contracts”).

     (b) Neither the Company nor any Subsidiary of the Company is in breach of or default under the terms of any Company Specified Contract where such breach or default would have, individually or in the aggregate, a Company Material Adverse Effect. To the knowledge of the Company, no party to any Company Specified Contract is in breach of or default under the terms of any Company Specified Contract where such breach or default would have, individually or in the aggregate, a Company Material Adverse Effect. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, each Company Specified Contract is a valid and binding obligation of the Company or the Subsidiary of the Company which is party thereto and, to the knowledge of the Company, of each other party thereto, and is in full force and effect, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and (ii) equitable remedies of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

     Section 3.22 Finders or Brokers. Except for UBS and Citigroup, neither the Company nor any of its Subsidiaries has engaged any investment banker, broker or finder in connection with the transactions contemplated by this Agreement who might be entitled to any fee or any commission in connection with or upon consummation of the Merger or the other transactions contemplated thereby.

     Section 3.23 Interested Party Transactions. Except for employment Contracts filed or incorporated by reference as an exhibit to a Company SEC Document filed prior to the date hereof or Company Benefit Plans, Section 3.23 of the Company Disclosure Letter sets forth a correct and complete list of the contracts or arrangements that are in existence as of the date of this Agreement under which the Company has any existing or future liabilities between the Company or any of its Subsidiaries, on the one hand, and, on the other hand, any (A) present

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officer or director of either the Company or any of its Subsidiaries or any person that has served as such an officer or director within the past two years or any of such officer’s or director’s immediate family members, (B) record or beneficial owner of more than 5% of the Shares as of the date hereof, or (C) to the knowledge of the Company, any Affiliate of any such officer, director or owner (other than the Company or any of its Subsidiaries) (each, an “Affiliate Transaction”). The Company has provided to Parent correct and complete copies of each Contract or other relevant documentation (including any amendments or modifications thereto) providing for each Affiliate Transaction.

     Section 3.24 Insurance. The Company and its Subsidiaries maintain, or are entitled to the benefits of, insurance covering their properties, operations, personnel and businesses that are customary for businesses of their type. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, none of the Company or its Subsidiaries has received notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such insurance, and all such insurance is outstanding and duly in force.

     Section 3.25 Customers and Suppliers. As of the date hereof, neither the Company nor any of its Subsidiaries has received any notice or has any reason to believe that any significant customer or distributor of the Company or any of its Subsidiaries has materially reduced or will materially reduce, the use of products or services of the Company or any of its Subsidiaries, either as a result of this Agreement, the Merger or the transactions contemplated hereby and thereby or otherwise. To the Company’s knowledge, as of the date hereof there is no dispute with a material customer that would reasonably be expected to jeopardize the Company’s relationship with that material customer. From June 30, 2006 through the date hereof, there has not been any change in the terms and conditions of sale of raw materials, supplies or other products or services supplied to the Company by its significant suppliers, and neither the Company nor any of its Subsidiaries has knowledge that there will be such a change (other than general and customary price increases), including as a result of this Agreement, the Merger and the transactions contemplated hereby.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

     Except as disclosed in the disclosure schedule delivered by Parent to the Company immediately prior to the execution of this Agreement (the “Parent Disclosure Letter”), Parent and Merger Sub jointly and severally represent and warrant to the Company as follows:

     Section 4.1 Qualification, Organization, Subsidiaries, etc. Each of Parent and Merger Sub is a legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization and has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted and is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so

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organized, validly existing, qualified or in good standing, or to have such power or authority, would not, individually or in the aggregate, prevent or materially delay the consummation of the Offer or the Closing or prevent or materially delay or materially impair the ability of Parent or Merger Sub to satisfy the Tender Offer Conditions or the conditions precedent to the Merger, to obtain financing for the Offer or the Merger or to consummate the Merger, the Offer and the other transactions contemplated by this Agreement (a “Parent Material Adverse Effect”). Parent has made available to the Company prior to the date of this Agreement a true and complete copy of the certificates of incorporation and by-laws or other equivalent organizational documents of Parent and Merger Sub, each as amended through the date hereof.

     Section 4.2 Corporate Authority Relative to This Agreement; No Violation.

     (a) Each of Parent and Merger Sub has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the board of directors of each of Parent and Merger Sub and by Parent, as the sole stockholder of Merger Sub, and, except for the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, no other corporate proceedings on the part of Parent or Merger Sub are necessary to authorize the consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Parent and Merger Sub and, assuming this Agreement constitutes the valid and binding agreement of the Company, this Agreement constitutes the valid and binding agreement of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms.

     (b) The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation of the Offer and the Merger by Parent and Merger Sub do not and will not require any consent, approval, authorization or permit of, action by, filing with or notification to any Governmental Entity, other than (i) the filing of the Certificate of Merger, (ii) compliance with the applicable requirements of the Exchange Act, (iii) compliance with any applicable state securities or blue sky laws, and (iv) the other consents and/or notices set forth on Section 4.2(b) of the Parent Disclosure Letter (collectively, clauses (i) through (iv), the “Parent Approvals”), and other than any consent, approval, authorization, permit, action, filing or notification the failure of which to make or obtain would not, individually or in the aggregate, have a Parent Material Adverse Effect.

     (c) The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation by Parent and Merger Sub of the Merger and the other transactions contemplated hereby do not and will not (i) contravene or conflict with the organizational or governing documents of Parent or any of its Subsidiaries, (ii) assuming compliance with the matters referenced in Section 4.2(b) and receipt of the Parent Approvals, contravene or conflict with or constitute a violation of any provision of any Law binding upon or applicable to Parent or any of its Subsidiaries or any of their respective properties or assets, or (iii) result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any material obligation or to the loss of a material benefit under any loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, lease, agreement, contract, instrument, permit, concession, franchise,

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right or license binding upon Parent or any of its Subsidiaries or result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of Parent or any of its Subsidiaries, other than, in the case of clauses (ii) and (iii), any such violation, conflict, default, termination, cancellation, acceleration, right, loss or Lien that would not have, individually or in the aggregate, a Parent Material Adverse Effect.

     Section 4.3 Investigations; Litigation. There is no investigation or review pending (or, to the knowledge of Parent, threatened) by any Governmental Entity with respect to Parent or any of its Subsidiaries which would have, individually or in the aggregate, a Parent Material Adverse Effect, and there are no actions, suits, inquiries, investigations or proceedings pending (or, to Parent’s knowledge, threatened) against or affecting Parent or its Subsidiaries, or any of their respective properties at law or in equity before, and there are no orders, judgments or decrees of, or before, any Governmental Entity, in each case which would have, individually or in the aggregate, a Parent Material Adverse Effect.

     Section 4.4 Proxy Statement; Schedule 14D-9, Other Information. None of the information provided by Parent or its Subsidiaries to be included in the Schedule 14D-9 or the Proxy Statement will, at the time it is filed with the SEC, or at the time it is first mailed to the stockholders of the Company or at the time of the Company Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

     Section 4.5 Financing. Attached as Annex I are true, accurate and complete copies, as of the date hereof, of (a) a fully executed equity commitment letter pursuant to which the Guarantor has committed to provide or cause to be provided the cash amounts set forth therein to provide equity financing to Parent and/or Merger Sub (the “Equity Commitment Letter”), and (b) a fully executed debt commitment letter and related term sheets from Bank of America, N.A., Merrill Lynch Capital Corporation, General Electric Capital Corporation, Banc of America Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and GE Capital Markets, Inc. (the “Debt Commitment Letter” and together with the Equity Commitment Letter, the “Financing Commitments”), pursuant to which, and subject to the terms and conditions thereof, certain lenders have committed to provide Parent or Merger Sub with loans in the amounts described therein, the proceeds of which may be used to consummate the Offer, the Merger and the other transactions contemplated hereby (the “Debt Financing” and together with the equity financing pursuant to the Equity Commitment Letter, the “Financing”). Each of the Financing Commitments, in the form so delivered, is a legal, valid and binding obligation of Parent and Merger Sub and, to the knowledge of Parent, of the parties thereto. The Financing Commitments are in full force and effect and have not been withdrawn or terminated or otherwise amended or modified in any respect. Neither Parent nor Merger Sub is in breach of any of the terms or conditions set forth therein and to the knowledge of Parent no event has occurred which, with or without notice, lapse of time or both, could reasonably be expected to constitute a breach or failure to satisfy a condition precedent set forth therein. Parent or Merger Sub has paid any and all commitment or other fees required by the Financing Commitments that are due as of the date hereof, and will pay, after the date hereof, all such commitments and fees as they become due. The proceeds from the Financing constitute all of the financing required for the consummation of the transactions contemplated hereby (including the funding of the Tender Facility Interest

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Support, if necessary, described in the Debt Commitment Letter), and are sufficient for the satisfaction of all of Parent’s and Merger Sub’s obligations under this Agreement, including the payment of the Per Share Amount pursuant to the Offer, the Merger Consideration and the Option and Stock-Based Consideration (and any fees and expenses of or payable by Parent, Merger Sub or the Surviving Corporation). The Financing Commitments contain all of the conditions precedent to the obligations of the parties thereunder to make the Financing available to Parent on the terms therein, and neither Parent nor Merger Sub has knowledge of facts or circumstances that would cause any conditions precedent to the Equity Commitment Letter or the Debt Commitment Letter not to be satisfied on a timely basis. Notwithstanding anything in this Agreement to the contrary, the Debt Commitment Letters may be superseded at the option of Parent or Merger Sub after the date of this Agreement but prior to the Effective Time by the New Financing Commitments in accordance with Section 5.11. In such event, the term “Financing Commitment” as used herein shall be deemed to include the New Financing Commitments to the extent then in effect.

     Section 4.6 Guarantee. Concurrently with the execution of this Agreement, Carlyle Partners IV, L.P. (the “Guarantor”) has delivered to the Company an amended and restated guarantee addressed to the Company in the form attached as Annex II to this Agreement, guaranteeing certain obligations of Parent and Merger Sub, respectively, under this Agreement (the “Guarantee”). The Guarantee constitutes the legal, valid and binding obligation of the Guarantor, enforceable in accordance with its terms.

     Section 4.7 Capitalization of Merger Sub. The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $0.01 per share, all of which are validly issued and outstanding. All of the issued and outstanding capital stock of Merger Sub is, and at the Effective Time will be, owned by Parent or a direct or indirect subsidiary of Parent. Merger Sub has outstanding no option, warrant, right, or any other agreement pursuant to which any person other than Parent may acquire any equity security of Merger Sub. Merger Sub has not conducted any business prior to the date hereof and has, and prior to the Effective Time will have, no assets, liabilities or obligations of any nature other than those incident to its formation and pursuant to this Agreement and the Merger and the other transactions contemplated by this Agreement.

     Section 4.8 No Vote of Parent Stockholders. No vote of the stockholders of Parent or the holders of any other securities of Parent (equity or otherwise) is required by any applicable Law, the certificate of incorporation or by-laws or other equivalent organizational documents of Parent or the applicable rules of any exchange on which securities of Parent are traded, in order for Parent to consummate the transactions contemplated hereby.

     Section 4.9 Finders or Brokers. Except for Merrill Lynch & Co., Inc. and Banc of America Securities LLC, neither Parent nor any of its Subsidiaries has employed any investment banker, broker or finder in connection with the transactions contemplated by this Agreement who might be entitled to any fee or any commission in connection with or upon consummation of the Offer and/or the Merger.

     Section 4.10 No Additional Representations. Parent acknowledges that neither the Company nor any person has made any representation or warranty, express or implied, as to the

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accuracy or completeness of any information regarding the Company furnished or made available to Parent and its Representatives except as expressly set forth in Article III (which includes the Company Disclosure Letter and the Company SEC Documents), and neither the Company, its directors, officers, employees, agents or other representatives, nor any other person shall be subject to any liability to Parent or any other person resulting from the Company’s making available to Parent or Parent’s use of such information, including the presentation materials delivered to Parent, as subsequently updated, supplemented or amended (the “Information Memorandum”), or any information, documents or material made available to Parent in the due diligence materials provided to Parent, including in the data room, other management presentations (formal or informal) or in any other form in connection with the transactions contemplated by this Agreement. Without limiting the foregoing, the Company makes no representation or warranty to Parent with respect to (i) the information set forth in the Information Memorandum or (ii) any financial projection or forecast relating to the Company or any of its Subsidiaries, whether or not included in the Information Memorandum or any management presentation.

     Section 4.11 Certain Arrangements. As of the date of this Agreement, there are no contracts, undertakings, commitments, agreements, obligations or understandings, whether written or oral, between Parent or Merger Sub or any of their affiliates, on the one hand, and any member of the Company’s management or the Board of Directors, on the other hand, relating in any way to the Company, the transactions contemplated by this Agreement or to the operations of the Company after the Effective Time.

     Section 4.12 HSR Filing. Parent has filed the required Notification and Report Forms under the HSR Act and the applicable waiting period under the HSR Act expired on January 3, 2007.

ARTICLE V

COVENANTS AND AGREEMENTS

     Section 5.1 Conduct of Business by the Company and Parent.

     (a) From and after the date hereof and prior to the date on which a majority of the Company’s directors are designees of Parent or Merger Sub or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1 (the “Termination Date”), and except (i) as may be required by applicable Law, (ii) as may be agreed in writing by Parent, with the prior written consent of Parent, (iii) as expressly contemplated, required or permitted by this Agreement or (iv) as set forth in Section 5.1 of the Company Disclosure Letter, the Company shall and shall cause each of its Subsidiaries to (x) conduct its business in the ordinary course consistent with past practice and (y) use commercially reasonable efforts to maintain and preserve intact its business organization and advantageous business relationships and to retain the services of its key officers and key employees; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision.

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     (b) Between the date hereof and the date on which a majority of the Company’s directors are designees of Parent or Merger Sub, except as set forth in Section 5.1 of the Company Disclosure Letter or expressly contemplated or expressly permitted by this Agreement, without the prior written consent of Parent, the Company:

     (i) shall not make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire or encumber, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock, except in connection with cashless exercises or similar transactions pursuant to the exercise of stock options or other awards issued and outstanding as of the date hereof under the Company Stock Plans or permitted hereunder to be granted after the date hereof; provided that the Company may continue to pay regular quarterly cash dividends on the Shares consistent with past practice (not to exceed $0.05 per share per quarter) and this Section 5.1(b)(i) shall not apply to dividends or distributions paid in cash by Subsidiaries to the Company or to other Subsidiaries in the ordinary course of business consistent with past practice;

     (ii) shall not, and shall not permit any of its Subsidiaries to, adjust, split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, except for any such transaction by a wholly owned Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction;

     (iii) shall not, and shall not permit any of its Subsidiaries to, make any material change (or file any such change) in any method of Tax accounting or make any material change in any Tax election (except, in each case, as in the ordinary course of business or as is consistent with past practice); settle or compromise any material Tax liability for an amount materially in excess of the amount reserved therefor on the financial statements included in the Company SEC Documents, or enter into any closing agreement relating to Taxes for an amount materially in excess of the amount reserved therefor on the financial statements included in the Company SEC Documents;

     (iv) except as required by existing written agreements or Company Benefit Plans, or as otherwise required by applicable Law, shall not, and shall not permit any of its Subsidiaries to (A) increase the compensation or other benefits payable or provided to the Company’s directors or executive officers except for increases to executive officers in the ordinary course of business consistent with past practice that become effective no earlier than July 1, 2007 and only in the event the Effective Time does not occur prior to such date, (B) enter into any employment, change in control, severance or retention agreement with any employee of the Company or (C) establish, adopt, enter into or amend any collective bargaining agreement, or Company Benefit Plan, except to the extent required to comply with Section 409A of the Code or as may be immaterial;

     (v) shall not, and shall not permit any of its Subsidiaries to, enter into or make any loans to any of its officers, directors, employees, agents or consultants (other than

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loans or advances in the ordinary course of business consistent with past practice, including without limitation stock loans made under the Company’s Stock/Loan Plan to the extent approved for fiscal 2007 on June 26, 2006 by the Compensation Committee and the Board of Directors) or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons, except as required by the terms of any Company Benefit Plan;

     (vi) shall not, and shall not permit any of its Subsidiaries to, materially change financial accounting policies or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP, SEC rule or policy or applicable Law;

     (vii) shall not, and shall not permit any of its material Subsidiaries to, amend or waive any provision of its certificate of incorporation or by-laws or similar applicable charter documents or in the case of the Company, enter into any agreement with any of its stockholders in their capacity as such;

     (viii) except for transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, shall not, and shall not permit any of its Subsidiaries to, issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock or other ownership interest in the Company or any Subsidiaries or any securities convertible into or exchangeable for any such shares or ownership interest, or any rights, warrants or options to acquire or with respect to any such shares of capital stock, ownership interest or convertible or exchangeable securities or take any action to cause to be exercisable any otherwise unexercisable Company Stock Option under any existing Company Stock Option Plan (except as otherwise provided by the terms of this Agreement or the express terms of any unexercisable options outstanding on the date hereof), other than (A) issuances of Shares in respect of any exercise of Company Stock Options and settlement of any Performance Shares outstanding on the date hereof or as may be granted after the date hereof as permitted under this Section 5.1(b), (B) the grant of equity compensation awards in the ordinary course of business consistent with past practice under the Company’s 2004 Amended and Restated Equity Incentive Compensation Plan in accordance with the Long-Term Incentive Compensation Program and Regular Stock/Loan and Restricted Stock Grant Program approved for fiscal 2007 on June 26, 2006 by the Compensation Committee and the Board of Directors, and (C) the acquisition of Shares from a holder of a Company Stock Option, Restricted Shares or Performance Shares in satisfaction of withholding obligations or in payment of the exercise price;

     (ix) except for transactions in the ordinary course of business consistent with past practice, among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, shall not, and shall not permit any of its material Subsidiaries to, directly or indirectly, purchase, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options to acquire any such shares;

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     (x) shall not, and shall not permit any of its Subsidiaries to, incur, assume, guarantee, prepay or otherwise become liable for any indebtedness for borrowed money (directly, contingently or otherwise), other than in the ordinary course of business consistent with past practice and except for (A) any indebtedness for borrowed money among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries and (B) indebtedness for borrowed money incurred pursuant to agreements in effect prior to the execution of this Agreement not to exceed $10 million in aggregate principal amount outstanding at any time incurred by the Company or any of its Subsidiaries; provided that no such indebtedness shall contain covenants that materially restrict the Offer, the Merger or that are materially inconsistent with the Financing Commitments in effect as of the date hereof;

     (xi) except for transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, shall not sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber (including securitizations), or subject to any Lien (other than Permitted Liens) or otherwise dispose of any material portion of its material properties or assets (excluding sales of finished goods inventories in the ordinary course of business), including the capital stock of Subsidiaries;

     (xii) shall not, and shall not permit any of its Subsidiaries to, modify, amend, terminate or waive any rights under any Company Specified Contract in any material respect in a manner which is adverse to the Company other than in the ordinary course of business or enter into any Company Specified Contract other than in the ordinary course of business and other than in response to an unexpected disruption in supply;

     (xiii) shall not make any capital expenditures having an aggregate value in excess of (i) with respect to the Company’s fiscal year ending June 30, 2007, together with the amount of capital expenditures made by the Company through the date hereof, $42 million and (ii) with respect to the Company’s fiscal quarter ending September 30, 2007, $10 million;

     (xiv) shall not make any investment in excess of $500,000 in the aggregate, whether by purchase of stock or securities, contributions to capital, property transfers, or entering into binding agreements with respect to any such investment or acquisition;

     (xv) shall not make any acquisition of another Person or business in excess of $500,000 in the aggregate, whether by purchase of stock or securities, contributions to capital, property transfers, or entering into binding agreements with respect to any such investment or acquisition;

     (xvi) shall not waive, release, assign, settle or compromise any claim, action or proceeding, other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages not in excess of $500,000 in the aggregate (excluding amounts to be paid under existing insurance policies) or otherwise pay, discharge or satisfy any claims, liabilities or obligations in excess of such amount, in each case, other than in the ordinary course consistent with past practice;

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     (xvii) shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;

     (xviii) shall not take any material action with respect to any affiliate of the Company (other than any wholly owned Subsidiaries of the Company) that is outside the ordinary course of business consistent with past practice;

     (xix) shall not agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors in support of, any of the actions prohibited by this Section 5.1(b); and

     (xx) shall not, and shall not permit any of its Subsidiaries to, agree, in writing or otherwise, to take any of the foregoing actions.

     (c) Parent agrees with the Company, on behalf of itself and its Subsidiaries and affiliates, that, between the date hereof and the Effective Time, Parent shall not, and shall not permit any of its Subsidiaries or affiliates to, take or agree to take any action (including entering into agreements with respect to any acquisitions, mergers, consolidations or business combinations) which would reasonably be expected to result in, individually or in the aggregate, a Parent Material Adverse Effect.

     Section 5.2 Access.

     (a) Subject to compliance with applicable Laws, the Company shall (i) provide to Parent and to its officers, employees, accountants, consultants, legal counsel, financial advisors and agents, lenders and other representatives (collectively, “Parent Representatives”) reasonable access during normal business hours, throughout the period prior to the earlier of the Effective Time and the Termination Date, to the Company’s and its Subsidiaries’ properties, contracts, commitments, books and records and (ii) furnish to Parent and its Parent Representatives such financial and operating data and other information as such Parent Representatives may reasonably request (including, but not limited to, furnishing to Parent the financial results of the Company in advance of any filing by the Company with the SEC containing such financial results) and (iii) instruct the employees, counsel, financial advisors, auditors and other authorized representatives (other than directors who are not employees) of the Company and its Subsidiaries to cooperate reasonably with Parent in its investigation of the Company and its Subsidiaries. The foregoing notwithstanding, the Company shall not be required to afford such access if it would unreasonably disrupt the operations of the Company or any of its Subsidiaries, would cause a violation of any agreement to which the Company or any of its Subsidiaries is a party, would cause a risk of a loss of privilege or trade secret protection to the Company or any of its Subsidiaries or would constitute a violation of any applicable Law, nor shall Parent or any of its Parent Representatives be permitted to perform any onsite procedure with respect to any property of the Company or any of its Subsidiaries.

     (b) Parent hereby agrees that all information provided to it or its Parent Representatives in connection with this Agreement and the consummation of the transactions contemplated hereby shall be deemed to be Evaluation Material, as such term is used in, and shall be treated in accordance with, the amended and restated confidentiality agreement, dated as

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of October 11, 2006, between the Company, Parent and Merger Sub (the “Confidentiality Agreement”); provided, that Parent shall be entitled to share such Evaluation Material with prospective co-investors or limited partners of the members of Parent and Merger Sub; provided further, however, that any prospective co-investors or limited partners of the shareholders of Parent to whom Parent provides Evaluation Material shall, prior to receiving such Evaluation Material, agree in writing to be bound by the confidentiality provisions of the Confidentiality Agreement or shall execute their own confidentiality agreements in identical or substantially identical form with the Company.

     Section 5.3 No Solicitation.

     (a) Subject to the provisions of this Section 5.3 set forth below, the Company agrees that neither it nor any of its Subsidiaries shall, and that it shall direct its and their respective officers, directors, employees, agents and representatives, including any investment banker, attorney or accountant retained by it or any of its Subsidiaries (“Representative”) not to, directly or indirectly, (i) solicit, initiate, knowingly encourage (including by providing information) or facilitate any inquiries, proposals or offers with respect to, or the making or completion of, any Alternative Proposal, (ii) engage or participate in any negotiations regarding, or provide or cause to be provided any non-public information or data relating to the Company or any of its Subsidiaries in connection with, or have any discussions with any Person relating to, an actual or proposed Alternative Proposal, or otherwise knowingly encourage or facilitate any effort or attempt to make or implement an Alternative Proposal, (iii) approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any Alternative Proposal, (iv) approve, endorse or recommend, or publicly announce an intention to approve, endorse or recommend, or enter into, any letter of intent, agreement in principle, merger agreement, acquisition agreement, option agreement or other similar agreement relating to any Alternative Proposal, (v) amend, terminate, waive or fail to enforce, or grant any consent under, any confidentiality, standstill or similar agreement (provided, that the Company shall be permitted to waive any such agreement to permit the counterparty thereto to make a non-public offer or proposal to the Board of Directors (or Special Committee) of the Company with respect to an Alternative Proposal (except that references in the definition thereof to “20%” shall be deemed to be references to “50%” for purposes of this proviso)). Without limiting the foregoing, it is understood that any violation of the foregoing restrictions by any Subsidiary of the Company or Representatives of the Company or any of its Subsidiaries shall be deemed to be a breach of this Section 5.3 by the Company.

     (b) The Company shall, shall cause each of its Subsidiaries to, and shall direct each of its Representatives to, immediately cease any existing solicitations, discussions or negotiations with any Person (other than the parties hereto) that has made or indicated an intention to make an Alternative Proposal.

     (c) Notwithstanding anything to the contrary in Section 5.3(a) or (b), the Company may, in response to an unsolicited Alternative Proposal which did not result from or arise in connection with a breach of Section 5.3(a) and which the Board of Directors (acting through its Special Committee) determines, in good faith, after consultation with its outside counsel and financial advisors, may reasonably be expected to lead to a Superior Proposal, (i) furnish non-public information with respect to the Company and its Subsidiaries to the Person making such

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Alternative Proposal and its Representatives pursuant to a customary confidentiality agreement no less restrictive of and no more favorable to the other party than the terms and conditions of the Confidentiality Agreement (it being understood and agreed that the Existing Confidentiality Agreement is deemed to satisfy this requirement with respect to the parties thereto); and (ii) participate in discussions or negotiations with such Person and its Representatives regarding such Alternative Proposal; provided, however, (i) that Parent shall be entitled to promptly receive an executed copy of such confidentiality agreement and (ii) that the Company shall promptly provide or make available to Parent any material non-public information concerning the Company or any of its Subsidiaries that is provided to the Person making such Alternative Proposal or its Representatives which was not previously provided or made available to Parent.

     (d) Neither the Board of Directors nor any committee thereof shall withdraw or modify the Recommendation in a manner adverse to Parent or Merger Sub, or publicly propose to do so, or approve or recommend or publicly propose to approve or recommend, any Alternative Proposal. Notwithstanding the foregoing or any other provision of this Agreement, if, prior to receipt of the Company Stockholder Approval, the Board of Directors or the Special Committee determines in good faith, after consultation with outside counsel, that failure to so withdraw, qualify or modify its Recommendation would be inconsistent with the Board of Directors’ or the Special Committee’s exercise of its fiduciary duties, the Board of Directors or any committee thereof may withdraw, qualify or modify its Recommendation (a “Change of Recommendation”); provided, however, that if such Change of Recommendation is the result of a Superior Proposal, the Company shall have first provided prior written notice to Parent that it is prepared to effect a Change of Recommendation in response to a Superior Proposal, which notice shall describe in reasonable detail and include any draft agreements pertaining to such Superior Proposal, and such Change of Recommendation can only be made if Parent has not made, within three Business Days of receipt of such notice, a proposal that the Board of Directors or any committee thereof determines is at least as favorable to the stockholders of the Company as such Superior Proposal.

     (e) The Company promptly (and in any event within 48 hours) shall advise Parent orally and in writing of (i) any Alternative Proposal or indication or inquiry with respect to or that would reasonably be expected to lead to any Alternative Proposal, (ii) any request for non-public information relating to the Company or its Subsidiaries, other than requests for information not reasonably expected to be related to an Alternative Proposal, and (iii) any inquiry or request for discussion or negotiation regarding an Alternative Proposal, including in each case the identity of the person making any such Alternative Proposal or indication or inquiry and the material terms of any such Alternative Proposal or indication or inquiry (including copies of any document or correspondence evidencing such Alternative Proposal or inquiry). The Company shall keep Parent reasonably informed on a reasonably current basis of any material change to the terms of any such Alternative Proposal or indication or inquiry.

     (f) Nothing contained in this Agreement shall prohibit the Company or its Board of Directors (or the Special Committee) from disclosing to its stockholders a position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act, or from issuing a “stop, look and listen” statement pending disclosure of its position thereunder.

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     (g) As used in this Agreement, “Alternative Proposal” shall mean (i) any inquiry, proposal or offer from any Person or group of Persons other than Parent or one of its Subsidiaries for a merger, reorganization, share exchange, consolidation, business combination, recapitalization, dissolution, liquidation, or similar transaction involving the Company (or any Subsidiary or Subsidiaries of the Company whose business constitutes 20% or more of the net revenues, net income or assets of the Company and its Subsidiaries, taken as a whole), (ii) any proposal for the issuance by the Company of over 20% of its equity securities or (iii) any proposal or offer to acquire in any manner, directly or indirectly, over 20% of the equity securities or consolidated total assets of the Company and its Subsidiaries, in each case other than the Offer or the Merger.

     (h) As used in this Agreement, “Superior Proposal” shall mean any Alternative Proposal (i) on terms which the Board of Directors (or the Special Committee) determines in good faith, after consultation with the Company’s outside legal counsel and financial advisors, to be more favorable to the holders of Shares than the Offer and the Merger, taking into account all the terms and conditions of such proposal and this Agreement and (ii) that the Board of Directors (or Special Committee) believes is reasonably capable of being completed, taking into account all financial, regulatory, legal and other aspects of such proposal; provided, however, that for purposes of the definition of “Superior Proposal”, the references to “20%” in the definitions of Alternative Proposal shall be deemed to be references to “50%”.

     Section 5.4 Filings; Other Actions.

     (a) If the Company Stockholder Approval is required under the DGCL, as promptly as reasonably practicable following the consummation or expiration of the Offer, the Company shall prepare and file with the SEC the Proxy Statement, which shall, subject to Section 5.3, include the Recommendation and shall use its reasonable best efforts to respond to any comments by the SEC staff in respect of the Proxy Statement. Parent and Merger Sub shall, and Parent shall cause Merger Sub to, provide to the Company such information as the Company may reasonably request for inclusion in the Proxy Statement. The Company shall use its reasonable best efforts to cause the Proxy Statement to be mailed to the Company’s stockholders as promptly as practicable after the Proxy Statement is cleared by the SEC. The Company shall as promptly as practicable notify Parent of the receipt of any oral or written comments from the SEC relating to the Proxy Statement. The Company shall cooperate and provide Parent with a reasonable opportunity to review and comment on the draft of the Proxy Statement (including each amendment or supplement thereto). The Company shall provide Parent with copies of all filings made and correspondence with the SEC with respect to the Proxy Statement. If at any time prior to the Effective Time, any information should be discovered by any party hereto which should be set forth in an amendment or supplement to the Proxy Statement so that the Proxy Statement would not include any misstatement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the party which discovers such information shall promptly notify the other parties hereto and, to the extent required by applicable Law, an appropriate amendment or supplement describing such information shall be promptly filed by the Company with the SEC and disseminated by the Company to the stockholders of the Company.

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     (b) Subject to the other provisions of this Agreement, the Company shall (i) take all action necessary in accordance with the DGCL and its certificate of incorporation and by-laws to duly call, give notice of, convene and hold a meeting of its stockholders as promptly as reasonably practicable following the mailing of the Proxy Statement for the purpose of obtaining the Company Stockholder Approval (such meeting or any adjournment or postponement thereof, the “Company Meeting”), and (ii) subject to a Change of Recommendation in accordance with Section 5.3(d), use all reasonable best efforts to solicit from its stockholders proxies in favor of the approval of this Agreement, the Merger and the other transactions contemplated hereby. Notwithstanding anything in this Agreement to the contrary, unless this Agreement is terminated in accordance with Section 7.1 and subject to compliance with Section 7.3, the Company, regardless of whether the Board of Directors (whether or not acting through the Special Committee, if then in existence) has approved, endorsed or recommended an Alternative Proposal, or has withdrawn, modified or amended the Recommendation, will submit this Agreement to the stockholders of the Company at the Company Meeting for the purpose of adopting this Agreement. Notwithstanding the foregoing, if a Short Form Merger may be effected in accordance with Section 1.8 and Section 253 of the DGCL, the parties hereto agree to take all necessary and appropriate action to cause the Merger to become effective on the dates specified in Section 1.2 without a Company Meeting, in accordance with Section 253 of the DGCL.

     Section 5.5 Employee Matters.

     (a) From and after the Effective Time, the Company shall, and Parent shall cause the Company to, honor all Company Benefit Plans and compensation arrangements and agreements in accordance with their terms as in effect immediately before the Effective Time, provided that nothing in this Agreement shall prohibit the amendment or termination of any such Company Benefit Plans, arrangements and agreements in accordance with their terms and applicable Law. For a period of twelve (12) months following the Effective Time, Parent shall provide, or shall cause to be provided, to each current and former employee of the Company and its Subsidiaries other than such employees covered by collective bargaining agreements (“Company Employees”) compensation opportunities and benefits that are no less favorable, in the aggregate, to the compensation opportunities and benefits provided to Company Employees immediately before the Effective Time (excluding the value of equity based awards), it being understood that each element of compensation and benefits may be different from the individual elements of compensation and benefits provided to Company Employees prior to the Effective Time.

     (b) For all purposes (including purposes of vesting, eligibility to participate and level of benefits) under the employee benefit plans of Parent and its Subsidiaries providing benefits to any Company Employees after the Effective Time (the “New Plans”), each Company Employee shall be credited with his or her years of service with the Company and its Subsidiaries and their respective predecessors before the Effective Time, to the same extent as such Company Employee was entitled, before the Effective Time, to credit for such service under any similar Company employee benefit plan in which such Company Employee participated or was eligible to participate immediately prior to the Effective Time, provided that the foregoing shall not apply with respect to benefit accrual under any defined benefit pension plan or retiree medical benefit plan to the extent that its application would result in a duplication of benefits. In addition, and without limiting the generality of the foregoing, (i) each Company Employee shall be

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immediately eligible to participate, without any waiting time, in any and all New Plans, unless such employee would not have been eligible to participate under comparable plans of the Company or its Subsidiaries immediately prior to the Effective Time and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision benefits to any Company Employee, Parent shall cause all pre-existing condition exclusions and actively-at-work requirements of such New Plan to be waived for such employee and his or her covered dependents, unless such conditions would not have been waived under the comparable plans of the Company or its Subsidiaries in which such employee participated immediately prior to the Effective Time and Parent shall cause any eligible expenses incurred by such employee and his or her covered dependents during the portion of the plan year of the Company Benefit Plan in which such Company Employee participated immediately before the consummation of the Merger (such plans, collectively, the “Old Plans”) ending on the date such employee’s participation in the corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan.

     (c) Parent hereby acknowledges that a “change of control” (or similar phrase) within the meaning of the Company Stock Plans (and award agreements thereunder) and the Company Benefit Plans, as applicable, including without limitation the change in control agreements, in each case listed on Section 5.5(c) of the Company Disclosure Letter will occur at or prior to the Effective Time, as applicable.

     (d) Nothing herein shall be deemed to be a guarantee of employment for any Employee, or to restrict the right of the Surviving Corporation to terminate any Employee. Notwithstanding the foregoing provisions of this Section 5.5, nothing contained herein, whether express or implied, (i) shall be treated as an amendment or other modification of any Company Benefit Plan, or (ii) shall limit the right of the Surviving Corporation or any of its Subsidiaries to amend, terminate or otherwise modify any Company Benefit Plan following the Closing Date. Parent, Merger Sub and the Company acknowledge and agree that all provisions contained in this Section 5.5 with respect to Employees are included for the sole benefit of Parent, Merger Sub and the Company, and that nothing herein, whether express or implied, shall create any third party beneficiary or other rights (i) in any other person, including, without limitation, any Employees, former Employees, any participant in any Company Benefit Plan, or any dependent or beneficiary thereof, or (ii) to continued employment with Parent, the Surviving Corporation, or any of their respective affiliates or continued participation in any Company Benefit Plan.

     Section 5.6 Efforts.

     (a) Subject to the terms and conditions set forth in this Agreement, each of the parties hereto shall, and the Company shall cause each of its Subsidiaries to, use all reasonable best efforts to take promptly, or cause to be taken, all actions, and to do promptly, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable under applicable Laws to consummate the Offer and to consummate and make effective the Merger and the other transactions contemplated by this Agreement, including (i) the obtaining of all necessary actions or nonactions, waivers, consents, clearances, approvals, and expirations or terminations of waiting periods, including the Specified Approvals and the Parent

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Approvals, from Governmental Entities and the making of all necessary registrations and filings and the taking of all steps as may be necessary to obtain an approval, clearance or waiver from, or to avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining of all necessary consents, approvals or waivers from third parties, (iii) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Merger and the other transactions contemplated by this Agreement and (iv) the execution and delivery of any additional instruments reasonably necessary to consummate the transactions contemplated by this Agreement; provided, however, that in no event shall the Company or any of its Subsidiaries be required to pay prior to the Effective Time any fee, penalty or other consideration to any third party for any consent or approval required for the consummation of the transactions contemplated by this Agreement under any contract or agreement (other than de minimis amounts or if Parent and Merger Sub have provided adequate assurance of repayment). Neither party shall take any action that is intended or would reasonably be expected to, individually or in the aggregate, result in any of the Tender Offer Conditions or the conditions to the Merger set forth in Article VI not being satisfied or the satisfaction of those conditions being materially delayed.

     (b) Subject to the terms and conditions herein provided and without limiting the foregoing, the Company and Parent shall (i) use reasonable best efforts to cooperate with each other in (x) determining whether any filings are required to be made with, or consents, permits, authorizations, waivers, clearances, approvals, and expirations or terminations of waiting periods are required to be obtained from, any third parties or Governmental Entities in connection with the execution and delivery of this Agreement and the consummation of, the Merger and the transactions contemplated hereby and (y) timely making all such filings and timely seeking all such consents, permits, authorizations or approvals, (ii) supply to any Governmental Entity as promptly as practicable any additional information or documents that may be requested pursuant to any Law or by such Governmental Entity and (iii) take, or cause to be taken all other actions and do, or cause to be done, all other things necessary, proper or advisable to consummate and make effective the Merger and the other transactions contemplated hereby, including taking all such further action as may be necessary to resolve such objections, if any, as state antitrust enforcement authorities or competition authorities of any other nation or other jurisdiction or any other person may assert under any Law with respect to the Merger and the other transactions contemplated hereby, and to avoid or eliminate each and every impediment under any Law that may be asserted by any Governmental Entity with respect to the Merger so as to enable the Expiration Date and the Closing to occur as soon as reasonably possible (and in any event no later than the End Date), including, without limitation, (x) proposing, negotiating, committing to and effecting, by consent decree, hold separate order or otherwise, the sale, divestiture or disposition of any material assets or businesses of Parent or its Subsidiaries or controlled affiliates or of the Company or its Subsidiaries and (y) otherwise taking or committing to take any actions that after the Closing Date would limit the freedom of Parent or its Subsidiaries’ (including the Surviving Corporation’s) or controlled affiliates’ freedom of action with respect to, or its ability to retain, one or more of its or its Subsidiaries (including the Surviving Corporation’s) businesses, product lines or assets, in each case as may be required in order to avoid the entry of or to effect the dissolution of, any injunction, temporary restraining order or other order in any suit or proceeding which would otherwise have the effect of preventing the consummation of the Offer on the Expiration Date or the Closing, materially delaying the Expiration Date or the Closing or delaying the Expiration Date or the Closing beyond the End

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Date; provided that neither the Company nor any of its Subsidiaries shall become subject to, or consent or agree to or otherwise take any action with respect to, any requirement, condition, understanding, agreement or order of a Governmental Entity to sell, to hold separate or otherwise dispose of, or to conduct, restrict, operate, invest or otherwise change the assets or business of the Company or any of its affiliates, unless such requirement, condition, understanding, agreement or order is binding on the Company only in the event that the Closing occurs.

     (c) Subject to applicable legal limitations and the instructions of any Governmental Entity, the Company and Parent shall keep each other apprised of the status of matters relating to the completion of the transactions contemplated hereby, including to the extent permitted by Law promptly furnishing the other with copies of notices or other communications sent or received by the Company or Parent, as the case may be, or any of their respective Subsidiaries, to or from any third party and/or any Governmental Entity with respect to such transactions. The Company and Parent shall permit the other party to review in advance any proposed communication to any supervisory or Governmental Entity. Each of the Company and Parent agrees not to participate in any substantive meeting or discussion, either in person or by telephone, with any Governmental Entity in connection with the proposed transactions unless it consults with the other party in advance and, to the extent not prohibited by such Governmental Entity, gives the other party the opportunity to attend and participate.

     (d) In furtherance and not in limitation of the covenants of the parties contained in this Section 5.6, if any administrative or judicial action or proceeding, including any proceeding by a private party, is instituted (or threatened to be instituted) challenging any transaction contemplated by this Agreement, each of the Company and Parent shall cooperate in all respects with each other and shall use their respective reasonable best efforts to contest and resist any such action or proceeding and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the Merger and the other transactions contemplated by this Agreement. Notwithstanding the foregoing or any other provision of this Agreement, nothing in this Section 5.6 shall limit a party’s right to terminate this Agreement pursuant to Section 7.1(b) or 7.1(c) so long as such party has, prior to such termination, complied with its obligations under this Section 5.6.

     (e) It is agreed that this Section 5.6 shall not govern the obligations of the parties with respect to obtaining the Financing, which obligations are set forth in Section 5.11.

     Section 5.7 Takeover Statute. If any “fair price,” “moratorium,” “control share acquisition” or other form of antitakeover statute or regulation shall become applicable to the Merger or the other transactions contemplated hereby, each of the Company and Parent and the members of their respective Boards of Directors shall grant such approvals and take such actions as are reasonably necessary so that the transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of such statute or regulation on the Merger and the other transactions contemplated hereby.

     Section 5.8 Public Announcements. Parent and the Company agree to issue a joint press release announcing the execution of this Agreement.

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     Section 5.9 Indemnification and Insurance.

     (a) Parent and Merger Sub agree that all rights to exculpation, indemnification and advancement of expenses now existing in favor of the current or former directors, officers or employees, as the case may be, of the Company or its Subsidiaries as provided in their respective certificates of incorporation or by-laws or other organization documents or in any agreement shall survive the Merger and shall continue in full force and effect. For a period of six (6) years from the earlier of the Acceptance Date and the Effective Time, Parent and the Surviving Corporation shall maintain in effect the exculpation, indemnification and advancement of expenses provisions of the Company’s and any Company Subsidiary’s certificates of incorporation and by-laws or similar organization documents as in effect immediately prior to the earlier of the Acceptance Date and the Effective Time or in any indemnification agreements of the Company or its Subsidiaries with any of their respective directors, officers or employees as in effect immediately prior to the earlier of the Acceptance Date and the Effective Time, and shall not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any individuals who at the earlier of the Acceptance Date and the Effective Time were current or former directors, officers or employees of the Company or any of its Subsidiaries; provided, however, that all rights to indemnification in respect of any Action pending or asserted or any claim made within such period shall continue until the disposition of such Action or resolution of such claim. From and after the earlier of the Acceptance Date and the Effective Time, Parent shall cause the Surviving Corporation and its Subsidiaries to honor, in accordance with their respective terms, each of the covenants contained in this Section 5.9 without limit as to time.

     (b) From and after the earlier of the Acceptance Date and the Effective Time each of Parent and the Surviving Corporation shall, to the fullest extent permitted under applicable Law, indemnify and hold harmless (and advance funds in respect of each of the foregoing) each current and former director, officer or employee of the Company or any of its Subsidiaries (each, together with such person’s heirs, executors or administrators, an “Indemnified Party”) against any costs or expenses (including advancing reasonable attorneys’ fees and expenses in advance of the final disposition of any claim, suit, proceeding or investigation to each Indemnified Party to the fullest extent permitted by Law), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative (an “Action”), arising out of, relating to or in connection with any action or omission occurring or alleged to have occurred whether before or after the earlier of the Acceptance Date and the Effective Time (including acts or omissions in connection with such persons serving as an officer, director or other fiduciary in any entity if such service was at the request or for the benefit of the Company); provided, however, that neither Parent nor the Surviving Corporation shall be liable for any settlement effected without either Parent’s or the Surviving Corporation’s prior written consent (which shall not be unreasonably withheld or delayed) and Parent and the Surviving Corporation shall not be obligated to pay the fees and expenses of more than one counsel (selected by a plurality of the applicable Indemnified Parties) for all Indemnified Parties in any jurisdiction with respect to any single such claim, action, suit, proceeding or investigation, unless the use of one counsel for such Indemnified Parties would present such counsel with a conflict of interest that would make such joint representation inappropriate. It shall be a condition to the advancement of any amounts to be paid in respect of legal and other fees and expenses that

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Parent or the Surviving Corporation receive an undertaking by the Indemnified Party to repay such legal and other fees and expenses paid in advance if it is ultimately determined that such Indemnified Party is not entitled to be indemnified under applicable Law. In the event of any such Action, Parent and the Surviving Corporation shall reasonably cooperate with the Indemnified Party in the defense of any such Action.

     (c) For a period of six (6) years from the earlier of the Acceptance Date and the Effective Time, Parent shall either cause to be maintained in effect the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by the Company and its Subsidiaries or provide substitute policies or purchase or cause the Surviving Corporation to purchase, a “tail policy,” in either case of at least the same coverage and amounts containing terms and conditions that are not less advantageous in the aggregate than such policy with respect to matters arising on or before the earlier of the Acceptance Date and the Effective Time; provided, however, that after the earlier of the Acceptance Date and the Effective Time, Parent shall not be required to pay with respect to such insurance policies in respect of any one policy year annual premiums in excess of 300% of the last annual premium paid by the Company prior to the date hereof in respect of the coverage required to be obtained pursuant hereto, but in such case shall purchase as much coverage as reasonably practicable for such amount; and further provided that if the Surviving Corporation purchases a “tail policy” and the same coverage costs more than 500% of such last annual premium, the Surviving Corporation shall purchase the maximum amount of coverage that can be obtained for 500% of such last annual premium. At the Company’s option, the Company may purchase prior to the earlier of the Acceptance Date and the Effective Time, a six-year prepaid “tail policy” on terms and conditions providing substantially equivalent benefits as the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by the Company and its Subsidiaries with respect to matters arising on or before the earlier of the Acceptance Date and the Effective Time, covering without limitation the transactions contemplated hereby; provided that the cost of such tail policy shall not exceed 500% of the last annual premium paid in respect of the current coverage. If such tail prepaid policy has been obtained by the Company prior to the Effective Time, Parent shall cause such policy to be maintained in full force and effect, for its full term, and cause all obligations thereunder to be honored by the Surviving Corporation.

     (d) Parent shall pay all reasonable expenses, including reasonable attorneys’ fees, that may be incurred by any Indemnified Party in enforcing the indemnity and other obligations provided in this Section 5.9.

     (e) The rights of each Indemnified Party hereunder shall be in addition to, and not in limitation of, any other rights such Indemnified Party may have under the certificates of incorporation or by-laws or other organization documents of the Company or any of its Subsidiaries or the Surviving Corporation, any other indemnification arrangement, the DGCL or otherwise. The provisions of this Section 5.9 shall survive the consummation of the Merger and expressly are intended to benefit, and are enforceable by, each of the Indemnified Parties.

     (f) In the event Parent, the Surviving Corporation or any of their respective successors or assigns (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any person, then, and in either such case, proper

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provision shall be made so that the successors and assigns of Parent or the Surviving Corporation, as the case may be, shall assume the obligations set forth in this Section 5.9.

     Section 5.10 Control of Operations. Without in any way limiting any party’s rights or obligations under this Agreement, the parties understand and agree that nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s operations prior to the earlier of the Acceptance Date and the Effective Time. Prior to the earlier of the Acceptance Date and the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations.

     Section 5.11 Financing.

     (a) Parent shall use its reasonable best efforts to obtain the Financing on the terms and conditions described in the Financing Commitments, including using its reasonable best efforts (i) to negotiate definitive agreements with respect thereto on the terms and conditions contained in the Financing Commitments, (ii) to satisfy all conditions applicable to Parent in such definitive agreements, (iii) to comply with its obligations under the Financing Commitments, (iv) to enforce its rights under the Financing Commitments and (v) seeking such third party consents as may be reasonably required in connection with the Financing. Parent shall give the Company prompt notice upon becoming aware of any material breach by any party of the Financing Commitments or any termination of the Financing Commitments. Parent shall keep the Company informed on a prompt basis and in reasonable detail of the status of its efforts to arrange the Financing (including providing the Company with copies of all documents related to the Financing (other than ancillary agreements subject to confidentiality agreements)). In connection with its obligations under this Section 5.11, Parent shall be permitted to amend, modify or replace any portion of the Financing Commitments with new Financing Commitments, including through co-investment or by financing from one or more other additional parties (the “New Financing Commitments”), provided that Parent shall not permit any amendment or modification to be made to, or any waiver of any material provision or remedy under, the Financing Commitments if such replacement (including through co-investment by or financing from one or more other additional parties), amendment, modification, waiver or remedy reduces the aggregate amount of the Financing available to consummate the Offer and the Merger and the other transactions contemplated hereby, adversely amends or expands the conditions to the drawdown of the Financing in any respect that would make such conditions less likely to be satisfied, that can reasonably be expected to delay the Closing or is adverse to the interests of the Company in any other non de minimis respect. In the event that all conditions to the Financing Commitments (other than, in connection with the Debt Financing, the availability or funding of any of the Equity Financing) have been satisfied in Parent’s good faith judgment, Parent shall use its reasonable best efforts to cause the lenders and the other Persons providing such Financing to fund the Financing required to consummate the Offer on the Expiration Date and the Merger on the Closing Date. In the event that Parent becomes aware of any event or circumstance that makes procurement of any portion of the Financing unlikely to occur in the manner or from the sources contemplated in the Financing Commitments, Parent shall promptly notify the Company and shall use its reasonable best efforts to arrange as promptly as practicable any such portion from alternative sources (including through co-investment by one or more additional parties) with terms and conditions no less favorable from the standpoint of Parent and Merger Sub and no more adverse to the ability of Parent and Merger Sub to consummate the

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transactions contemplated by this Agreement. Parent and Merger Sub acknowledge and agree that their respective obligations to consummate the Agreement are not conditioned or contingent upon receipt of the Financing. In the event that Parent organizes any other subsidiaries to participate in the Financing of the transactions contemplated by this Agreement, (i) all of the capital stock of such subsidiaries will be owned directly or indirectly by Parent, (ii) Parent will cause each such subsidiary to perform their respective obligations under the Debt Commitment Letter including, without limitation, funding the Tender Facility Interest Support, if necessary, as described in the Debt Commitment Letter, and (iii) Parent will cause such subsidiaries to become a party to this Agreement to the extent necessary to ensure that such subsidiaries become obligated to provide Merger Sub with the funds required to fulfill its obligations under this Agreement, including the payment of the Per Share Amount, the Merger Consideration and the Option and Stock-Based Consideration (and any fees and expenses of or payable by Merger Sub or the Surviving Corporation).

     (b) The Company will and will cause its Subsidiaries to and will use reasonable efforts to cause each of its and their respective Representatives, including legal and accounting, to provide all cooperation reasonably requested by Parent in connection with the Financing and the other transactions contemplated by this Agreement (provided that such requested cooperation does not unreasonably interfere with the ongoing operations of the Company and its Subsidiaries), including (i) providing to the parties providing the Financing all financial statements and other information relating to the Company and its Subsidiaries that are customarily required for financings similar to the Tender Facility or the Take-Out Facilities (each as defined in the Debt Commitment Letter), as applicable, and using reasonable best efforts to provide such other financial information as Parent shall reasonably request in order to consummate the Debt Financing, (ii) participating in a reasonable number of meetings, drafting sessions and due diligence sessions in connection with the Financing, (iii) assisting in the preparation of (A) one or more offering documents or confidential information memoranda for any of the Debt Financing (including the execution and delivery of one or more customary representation letters in connection therewith); provided that any such memoranda and similar documents need not be issued by the Company or any of its Subsidiaries; provided, further, that any such memoranda shall contain disclosure and financial statements with respect to the Company or the Surviving Corporation reflecting the Surviving Corporation and/or its Subsidiaries as the obligor and (B) materials for rating agency presentations, (iv) reasonably cooperating with the marketing efforts for any of the Debt Financing, including providing assistance in the preparation for, and participating in, meetings, due diligence sessions and similar presentations to and with, among others, prospective lenders, investors and rating agencies, and (v) executing and delivering (or using reasonable best efforts to obtain from advisors), and causing its Subsidiaries to execute and deliver (or use reasonable best efforts to obtain from advisors) or obtain from advisors, customary certificates (including a certificate of the chief financial officer of the Company with respect to solvency matters), accounting comfort letters, legal opinions (which may be reasoned if circumstances require), surveys, title insurance or other documents and instruments relating to guarantees, the pledge of collateral and other matters ancillary to the Financing as may be reasonably requested by Parent in connection with the Financing and otherwise reasonably facilitating the pledge of collateral and providing of guarantees contemplated by the Debt Commitment Letter; provided, however, that no obligation of the Company or any of its Subsidiaries under any such certificate, document or instrument (other than the representation letter referred to above) shall be effective until the Effective Time.

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The foregoing notwithstanding, (x) no pre-Closing director shall be required to take any action with respect to the foregoing and neither the Company nor any of its Subsidiaries shall be obligated to take any action that requires action or approval by the pre-Closing directors, (y) no obligation of the Company or any of its Subsidiaries or Representatives under any agreement, certificate, document or instrument shall be effective until the Effective Time, and (z) none of the Company or any of its Subsidiaries or Representatives shall be required to pay any commitment or other similar fee or incur any other cost or expense that is not simultaneously reimbursed by Parent in connection with the Debt Financing prior to the Effective Time. Parent shall upon request by the Company reimburse the Company for all reasonable out-of-pocket costs incurred by the Company or its Subsidiaries in connection with such cooperation and shall indemnify and hold harmless the Company, its Subsidiaries and their respective Representatives for and against any and all losses suffered or incurred by them in connection with the arrangement of the Debt Financing and any information utilized in connection therewith (other than information provided by the Company or its Subsidiaries) (such costs and losses, the “Company Financing Expenses”), provided, that Parent’s obligation to pay such Company Financing Expenses after the termination of this Agreement shall be subject to the limitations set forth in the last sentence of Section 7.3(e) . Any other provision hereof notwithstanding, neither the Company nor any of its Subsidiaries, Affiliates or Representatives shall be required to incur any cost, fee, expense or liability in excess of $250,000 in the aggregate for all such Persons for all such costs, fees, expenses or liabilities in connection with Section 5.11, except to the extent the Cap of the Guarantee is increased in respect of such additional amounts. All non-public or otherwise confidential information regarding the Company obtained by Parent, Merger Sub or their Representatives pursuant to this Section 5.11 shall be kept confidential in accordance with the Confidentiality Agreement.

     Section 5.12 Stockholder Litigation. The Company shall give Parent the opportunity to participate, subject to a customary joint defense agreement, in, but not control, the defense or settlement of any stockholder litigation against the Company or its directors or officers relating to the Offer, the Merger or any other transactions contemplated hereby; provided, however, that no such settlement shall be agreed to without Parent’s consent. In the event that (i) a proposed settlement of any stockholder litigation (of which Parent has been advised and kept informed in accordance with the terms of this Section 5.12) would not have a Company Material Adverse Effect, (ii) Parent does not consent to such proposed settlement and (iii) the ultimate resolution of such litigation is less favorable to the Company and its Subsidiaries than such proposed settlement, then such resolution and the effects thereof on the Company and its Subsidiaries (to the extent so less favorable) shall not constitute, or be considered in determining the existence or occurrence of, a Company Material Adverse Effect.

     Section 5.13 Notification of Certain Matters. The Company shall give prompt notice to Parent, and Parent shall give prompt notice to the Company, of (i) any notice or other communication received by such party from any Governmental Entity in connection with the Offer, the Merger or the other transactions contemplated hereby or from any person alleging that the consent of such person is or may be required in connection with the Offer, the Merger or the other transactions contemplated hereby, if the subject matter of such communication or the failure of such party to obtain such consent could be material to the Company, the Surviving Corporation or Parent, (ii) any actions, suits, claims, investigations or proceedings commenced or, to such party’s knowledge, threatened against, relating to or involving or otherwise affecting

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such party or any of its Subsidiaries which relate to the Offer, the Merger or the other transactions contemplated hereby, (iii) the discovery of any fact or circumstance that, or the occurrence or non-occurrence of any event the occurrence or non-occurrence of which, would cause or result in any of the Tender Offer Conditions or any of the conditions set forth in Article VI not being satisfied or satisfaction of those conditions being materially delayed in violation of any provision of this Agreement; provided, however, that the delivery of any notice pursuant to this Section 5.13 shall not (x) cure any breach of, or non-compliance with, any other provision of this Agreement or (y) limit the remedies available to the party receiving such notice. The Company shall notify Parent, on a reasonably current basis, of any events or changes with respect to any material regulatory or other investigation or action involving the Company or any of its affiliates by any Governmental Entity, and shall reasonably cooperate with Parent or its affiliates in efforts to mitigate any adverse consequences to Parent or its affiliates which may arise (including by coordinating and providing assistance in meeting with regulators). The parties agree and acknowledge that, except with respect to clause (iii) of the first sentence of this Section 5.13, the Company’s compliance or failure of compliance with this Section 5.13 shall not be taken into account for purposes of determining whether the condition referred to in paragraph (d) of Annex III shall have been satisfied.

     Section 5.14 Private Placement Notes; Credit Agreement. At the written request of Parent, the Company shall, to the extent permitted by the terms thereof, take all actions reasonably requested by Parent that are necessary or advisable, including the delivery of all such notices, certificates and other documents pursuant to each note purchase agreement and each other agreement governing the respective Private Placement Notes, to repay all of the Private Placement Notes outstanding on the Closing Date in accordance with the applicable provisions of such agreements; provided that the Company shall not be required to provide any irrevocable notice or take any other irrevocable act regarding such repurchase unless (i) such action is taken simultaneously with the Merger being consummated and (ii) prior to the Company’s being required to take any of the actions described in this proviso, Parent shall have, or shall have caused to be, deposited with the trustee, or other appropriate recipient of such funds, under the applicable agreement governing the Private Placement Notes, sufficient funds to effect such repayment. The repayment of such Private Placement Notes shall not be required to be effective prior to the Effective Time and shall be expressly conditioned on the occurrence of the Effective Time. Parent hereby covenants and agrees to provide (or to cause to be provided) immediately available funds for the full payment at the Effective Time of all Private Placement Notes properly tendered and not withdrawn. The Company shall provide Parent with a reasonable period of time to review and comment on all notices, certificates and other documents to be delivered to holders of any of the Private Placement Notes (each of which notice, certificate and document shall be delivered contemporaneously to Parent) and each such notice, certificate and document shall be subject to the prior written approval of Parent. Notwithstanding any other provision of this Agreement, the Company shall have no obligation under any such notice, certificate or other document until the Effective Time, and Parent shall upon request by the Company promptly reimburse the Company for all reasonable out-of-pocket costs incurred by the Company in connection with the repayment of the Private Placement Notes and shall indemnify and hold harmless the Company and its Representatives for and against any and all losses suffered or incurred by them, or to which any of the Company or its Representatives may become subject, arising out of or in any way in connection with the repayment or any actions taken, or not taken, by the Company or its Representatives pursuant to this Section 5.14 (such

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costs and losses, the “Company Note Repurchase Expenses”), provided, that Parent’s obligation to pay such Company Note Repurchase Expenses after the termination of this Agreement shall be subject to the limitations set forth in the last sentence of Section 7.3(e) . The Company shall use its reasonable best efforts to take the action referred to in Section 5.14 of the Company Disclosure Letter. Any other provision hereof notwithstanding, neither the Company nor any of its Subsidiaries shall be required to incur any cost, fee, expense or liabilities in excess of $250,000 in the aggregate for all such Persons for all such costs, fees, expenses or liabilities in connection with this Section 5.14, except to the extent the Cap of the Guarantee is increased in respect of such additional amounts. The parties agree and acknowledge that the Company’s compliance or failure of compliance with this Section 5.14 shall not be taken into account for purposes of determining whether the condition referred to in paragraph (d) of Annex III shall have been satisfied. The Company shall be deemed to have satisfied each of its obligations set forth in this Section 5.14 if the Company shall have used its reasonable best efforts to comply with such obligations, regardless of the actual outcome of any actions in respect of the Private Placement Notes or the Credit Agreement.

ARTICLE VI

CONDITIONS TO THE MERGER

     Section 6.1 Conditions to Each Party’s Obligation to Effect the Merger. The respective obligations of each party to effect the Merger shall be subject to the fulfillment (or waiver by Parent and the Company) at or prior to the Effective Time of only the following conditions:

     (a) Unless the Merger is consummated pursuant to Section 253 of the DGCL, the Company Stockholder Approval shall have been obtained.

     (b) No Governmental Entity of competent jurisdiction shall have enacted, issued or entered any restraining order, preliminary or permanent injunction or similar order or legal restraint or prohibition which remains in effect that enjoins or otherwise prohibits consummation of the Merger.

     (c) Merger Sub shall have accepted for purchase the Shares tendered pursuant to the Offer in accordance with the terms hereof and thereof, provided that this condition shall be deemed satisfied if Merger Sub shall have failed, in breach of this Agreement, to accept for purchase any Shares tendered pursuant to the Offer.

ARTICLE VII

TERMINATION

     Section 7.1 Termination or Abandonment. Anything contained in this Agreement to the contrary notwithstanding, this Agreement may be terminated and the Offer or the Merger may be abandoned at any time prior to the Effective Time, whether before or after any approval by the stockholders of the Company of the matters presented in connection with the Merger:

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     (a) by the mutual written consent of the Company and Parent;

     (b) by either the Company or Parent, prior to the purchase of Shares pursuant to the Offer, if (i) the Effective Time shall not have occurred on or before June 30, 2007, (the “End Date”) and (ii) the party seeking to terminate this Agreement pursuant to this Section 7.1(b) shall not have breached in any material respect its obligations under this Agreement in any manner that shall have proximately caused the failure to consummate the Merger on or before such date;

     (c) by either the Company or Parent if any court of competent jurisdiction shall have issued or entered an injunction or similar legal restraint or order permanently enjoining or otherwise prohibiting the consummation of the Offer or the Merger, and such injunction, legal restraint or order shall have become final and non-appealable, provided that the party seeking to terminate this Agreement pursuant to this Section 7.1(c) shall have used such efforts as may be required by Section 5.6 to prevent, oppose and remove such injunction;

     (d) by either the Company or Parent, at any time after March 16, 2007, if, as of the then most recent Expiration Date occurring on or after March 16, 2007, all of the Tender Offer Conditions (other than the Minimum Condition) were satisfied for at least two consecutive Business Days prior to such Expiration Date, and as of the expiration time on such Expiration Date, the Minimum Condition is not satisfied;

     (e) by the Company, if Parent or Merger Sub shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (A) would give rise to a Parent Material Adverse Effect or would result in a failure of a condition set forth in Section 6.1 or Annex III to be satisfied or the failure of the Acceptance Date or the Closing to occur and (B) cannot be cured by the End Date, provided that the Company shall have given Parent written notice, delivered at least thirty (30) days prior to such termination, stating the Company’s intention to terminate this Agreement pursuant to this Section 7.1(e) and the basis for such termination;

     (f) by Parent, if the Company shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (A) would result in a failure of a condition set forth in paragraphs (c) or (d) of Annex III or Section 6.1 to be satisfied or failure of the Offer to be consummated and (B) cannot be cured by the End Date, provided that Parent shall have given the Company written notice, delivered at least thirty (30) days prior to such termination, stating Parent’s intention to terminate this Agreement pursuant to this Section 7.1(f) and the basis for such termination;

     (g) by the Company in order to enter into a transaction that is a Superior Proposal, if, prior to the Acceptance Date, (A) the Board of Directors (or the Special Committee) has received a Superior Proposal, (B) the Company has notified Parent in writing of its intention to terminate this Agreement pursuant to this Section 7.1(g) and included with such notice the most current written agreement relating to the transaction that constitutes such Superior Proposal, (C) at least 5 Business Days following receipt by Parent of the notice referred to in clause (B) above, and taking into account any revised proposal made by Parent since receipt of the notice referred to in clause (B) above, the Board of Directors (or the Special Committee) shall have determined that such revised proposal is not at least as favorable to the stockholders of the Company as such

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Superior Proposal, and (D) prior to or concurrently with such termination, the Company pays the fee due under Section 7.3;

     (h) by the Company, if (i) the Merger shall not have been consummated within five (5) Business Days of the first date upon which all conditions set forth in Section 6.1 are satisfied and at the time of such termination such conditions continue to be satisfied; provided that the Company shall not terminate this Agreement under this Section 7.1(h)(i) before the 25th Business Day after the date hereof; (ii) Merger Sub shall have terminated the Offer or failed to extend the Offer to the extent required by Section 1A.1(d) (in either case, other then in connection with a valid termination of this Agreement in accordance with Section 7.1); or (iii) at any Expiration Date, Merger Sub shall fail to accept for payment and pay for Shares validly tendered and not withdrawn in the Offer subject to the terms of and in accordance with Section 1A.1(e);

     (i) by Parent, prior to the purchase of Shares in the Offer, if the Board of Directors or the Special Committee withdraws, modifies or qualifies in a manner adverse to Parent or Merger Sub, or publicly proposes to withdraw, modify or qualify, in a manner adverse to Parent or Merger Sub, its Recommendation, or approves, endorses or recommends, or publicly proposes to approve, endorse or recommend, any Alternative Proposal; or

     (j) by Parent, if since the date of this Agreement and prior to the purchase of Shares in the Offer there shall have been a Company Material Adverse Effect that cannot be cured by the End Date.

     Section 7.2 Effect of Termination. In the event of termination of this Agreement pursuant to Section 7.1, this Agreement shall forthwith become null and void and there shall be no liability or obligation on the part of the Company, Parent, Merger Sub or their respective Subsidiaries or affiliates, except that the Confidentiality Agreement, the Guarantee and the provisions of Section 7.3 and Article VIII will survive the termination hereof; provided, however, that nothing herein shall relieve any party from liability for willful breach of this Agreement, in which case the aggrieved party shall, subject to the limitations on liability set forth elsewhere herein, be entitled to all rights and remedies available at law or in equity.

     Section 7.3 Termination Fees.

     (a) In the event that:

          (i) (A) after the date of this Agreement, any Alternative Proposal (substituting 40% for the 20% threshold set forth in the definition of “Alternative Proposal”) (a “Qualifying Transaction”) is or continues to be publicly proposed or publicly disclosed, (B) this Agreement is terminated by Parent pursuant to Section 7.1(f) (so long as a proposal regarding a Qualifying Transaction remains outstanding at the time of the event giving rise to the termination) or by Parent or the Company pursuant to Section 7.1(d) (so long as a proposal regarding a Qualifying Transaction remains outstanding as of the most recent Expiration Date referred to in Section 7.1(d)), and (C) the Company enters into a definitive agreement with respect to, or consummates, a

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transaction contemplated by any proposal regarding a Qualifying Transaction within twelve (12) months of the date this Agreement is terminated;

          (ii) this Agreement is terminated by the Company pursuant to Section 7.1(g); or

          (iii) this Agreement is terminated by Parent pursuant to Section 7.1(i) .

then in any such event under clause (i), (ii) or (iii) of this Section 7.3(a), the Company shall pay to TC Group IV, L.L.C. a termination fee of $29.0 million in cash (the “Termination Fee”), it being understood that in no event shall the Company be required to pay the Termination Fee on more than one occasion.

     In the event that a proposal regarding a Qualifying Transaction shall have been made known to the public or shall have been made directly to the stockholders of the Company generally or any Person shall have publicly announced an intention (whether or not conditional or withdrawn) to make a proposal regarding a Qualifying Transaction that reasonably appears to be bona fide and thereafter this Agreement is terminated by the Company or Parent pursuant to Section 7.1(d) and no Termination Fee is yet payable in respect thereof pursuant to Section 7.3(a)(i), then the Company shall pay to Parent all of the Expenses (as hereinafter defined) of Parent and Merger Sub and thereafter if the Company becomes obligated to pay to Parent the Termination Fee pursuant to Section 7.3(a)(i) such payment obligation shall be reduced by the amount of Expenses previously actually paid to Parent pursuant to this sentence. As used herein, “Expenses” shall mean all reasonable out-of-pocket documented fees and expenses (including all fees and expenses of counsel, accountants, consultants, financial advisors and investment bankers of Parent and its Affiliates), incurred by Parent or Merger Sub or on their behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement and the Financing and all other matters related to the Merger; provided that such fees and expenses shall not in any case exceed $10 million in the aggregate.

     (b) Any provision in this Agreement to the contrary notwithstanding, in the event that (i) the Company shall terminate this Agreement pursuant to Section 7.1(e) and at the time of such termination there is no state of facts or circumstances (excluding the breach by Parent or Merger Sub or the public announcement by the Company of such breach (each, a “Breach Fact”)) that would reasonably be expected to cause the conditions set forth in Annex III (other than clause (b) thereof) and Section 6.1(b) not to be satisfied on the End Date assuming the Expiration Date and the Closing were to be scheduled on the End Date, (ii) the Company shall terminate this Agreement pursuant to Section 7.1(h), or (iii) Parent or the Company shall terminate this Agreement pursuant to Section 7.1(b) and, at the time of such termination, the conditions set forth in Annex III (other than clause (b) thereof) have been satisfied (other than where a Breach Fact would reasonably be deemed to have caused the failure of any such condition to be satisfied), then in any such case Parent shall pay to the Company a fee of $35 million in cash (the “Parent Termination Fee”), it being understood that in no event shall Parent be required to pay the Parent Termination Fee on more than one occasion. The Parent Termination Fee shall be paid to the Company concurrent with termination of this Agreement by Parent or not later than

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two (2) Business Days following termination of this Agreement by the Company, as the case may be.

     (c) Any payment required to be made pursuant to clause (i) of Section 7.3(a) shall be made to Parent promptly following the earlier of the execution of a definitive agreement with respect to, or the consummation of, any Qualifying Transaction (and in any event not later than two Business Days after delivery to the Company of notice of demand for payment); any payment required to be made pursuant to clause (ii) of Section 7.3(a) shall be made to Parent concurrently with, and as a condition to the effectiveness of, the termination of this Agreement by the Company pursuant to Section 7.1(g); any payment required to be made pursuant to clause (iii) of Section 7.3(a) shall be made promptly following termination of this Agreement by Parent (and in any event not later than two Business Days after delivery to the Company of notice of demand for payment); and any such payment shall be made by wire transfer of immediately available funds to an account to be designated by Parent. In circumstances in which Expenses are payable, such payment shall be made to Parent not later than two Business Days after delivery to the Company of an itemization setting forth in reasonable detail all Expenses (which itemization may be supplemented and updated from time to time by Parent until the 60^th day after Parent delivers such notice of demand for payment), and all such payments shall be made by wire transfer of immediately available funds to an account to be designated by Parent.

     (d) In the event that the Company shall fail to pay the Termination Fee and/or Expenses, or Parent shall fail to pay the Parent Termination Fee, required pursuant to this Section 7.3 when due, such fee and/or Expenses, as the case may be, shall accrue interest for the period commencing on the date such fee became past due, at a rate equal to the rate of interest publicly announced by Citibank, in the City of New York from time to time during such period, as such bank’s Prime Lending Rate (the “Interest Rate”). In addition, if either party shall fail to pay such fee and/or Expenses, as the case may be, when due, the such owing party shall also pay to the owed party all of the owed party’s costs and expenses (including attorneys’ fees) in connection with efforts to collect such fee and/or Expenses, as the case may be. Parent and the Company acknowledges that the fees, Expense reimbursement and the other provisions of this Section 7.3 are an integral part of the Offer and the Merger and that, without these agreements, Parent and the Company would not enter into this Agreement.

     (e) Each of the parties hereto acknowledges that the agreements contained in this Section 7.3 are an integral part of the transactions contemplated by this Agreement and that neither the Termination Fee nor the Parent Termination Fee is a penalty, but rather is liquidated damages in a reasonable amount that will compensate Parent and Merger Sub or the Company, as the case may be, for the efforts and resources expended and opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the transactions contemplated hereby, which amount would otherwise be impossible to calculate with precision. Notwithstanding anything to the contrary in this Agreement, the Company’s right to receive payment of the Parent Termination Fee pursuant to this Section 7.3 or the guarantee thereof pursuant to the Guarantee and to require that Parent, Merger Sub and Guarantor perform their respective obligations under (i) Section 7.3 and the Guarantee in accordance with their terms, (ii) to pay the Company Financing Expenses and (iii) to pay the Company Note Repayment Expenses shall be the exclusive remedy of the Company against Parent, Merger Sub, Guarantor or any of their respective stockholders, partners,

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members, directors, Affiliates, officers or agents for (x) the loss suffered as a result of any failure of the Merger to be consummated and (y) any other losses, damages, obligations or liabilities suffered as a result of or under this Agreement and the transactions contemplated hereby, and none of Parent, Merger Sub, Guarantor or any of their respective stockholders, partners, members, directors, officers or agents, as the case may be, shall have any liability or obligation relating to or arising out of this Agreement or the transactions contemplated hereby other than any such liability in respect of the Parent Termination Fee and the Guarantee, provided, however, that Parent shall be obligated with respect to Sections 5.2(b) and the last sentence of Section 5.11(b); and provided further, however, that Parent, Merger Sub and Guarantor shall be relieved of any liability for the Company Financing Expenses and the Company Note Repayment Expenses in the event this Agreement is terminated in a circumstance in which the Termination Fee is payable or would become payable upon the occurrence of the event referred to Section 7.3(a)(i)(C) and provided further that nothing herein shall relieve Parent or Merger Sub of liability to pay for Shares accepted for payment in the Offer.

ARTICLE VIII

MISCELLANEOUS

     Section 8.1 No Survival of Representations and Warranties. None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the earlier of the Acceptance Date and the Effective Time.

     Section 8.2 Expenses. Except as set forth in Section 7.3 or in the Guarantee, whether or not the Merger is consummated, all costs and expenses incurred in connection with the Merger, this Agreement and the transactions contemplated hereby shall be paid by the party incurring or required to incur such expenses, except that expenses incurred in connection with the printing, filing and mailing of the Proxy Statement (including applicable SEC filing fees) and all fees paid in respect of any regulatory filings shall be borne one half by Parent and one half by the Company.

     Section 8.3 Counterparts; Effectiveness. This Agreement may be executed in two or more consecutive counterparts (including by facsimile), each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument, and shall become effective when one or more counterparts have been signed by each of the parties and delivered (by telecopy or otherwise) to the other parties.

     Section 8.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

     Section 8.5 Jurisdiction; Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that prior to the valid and effective termination of this Agreement in accordance with Article VII the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and

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to enforce specifically the terms and provisions of this Agreement exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware). The parties agree that (a) the Company shall be entitled to specific performance against Parent and Merger Sub (i) of Parent’s or Merger Sub’s obligations to pay the Parent Termination Fee pursuant to Section 7.3(b) and their respective obligations in respect of the Company Financing Expenses and the Company Note Repayment Expenses and (ii) to prevent any breach by Parent or Merger Sub of Section 5.2(b) and the last sentence of Section 5.11(b) or by Parent or Merger Sub of the obligation to pay for any Shares accepted for payment in the Offer and (b) Parent shall be entitled to specific performance against the Company of the Company’s obligation to pay the Termination Fee and the Expenses pursuant to Section 7.3(a) . In addition, each of the parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party hereto or its successors or assigns, shall be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware). Each of the parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the aforesaid courts. Each of the parties hereto hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this Section 8.5, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by the applicable Law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

     Section 8.6 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     Section 8.7 Notices. Any notice required to be given hereunder shall be sufficient if in writing, and sent by facsimile transmission (provided that any notice received by facsimile transmission or otherwise at the addressee’s location on any Business Day after 5:00 p.m. (addressee’s local time) shall be deemed to have been received at 9:00 a.m. (addressee’s local time) on the next Business Day), by reliable overnight delivery service (with proof of service), hand delivery or certified or registered mail (return receipt requested and first-class postage prepaid), addressed as follows:

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To Parent or Merger Sub:

c/o The Carlyle Group

1001 Pennsylvania Avenue, NW

Suite 220 South

Washington, DC 20004

Facsimile: (202) 347-1818

Attention: Glenn A. Youngkin

with a copy to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Facsimile: (212) 909-6836

Attention: Paul S. Bird, Esq.

To the Company:

ElkCorp

14911 Quorum Drive

Suite 600

Dallas, TX 75254

Facsimile: (972) 851-0552

Attention: David G. Sisler, Esq.

with a copy to:

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Facsimile: (212) 403-2000

Attention: Mark Gordon, Esq.

     or to such other address as any party shall specify by written notice so given, and such notice shall be deemed to have been delivered as of the date so telecommunicated, personally delivered or received. Any party to this Agreement may notify any other party of any changes to the address or any of the other details specified in this paragraph; provided, however, that such notification shall only be effective on the date specified in such notice or two (2) Business Days after the notice is given, whichever is later. Rejection or other refusal to accept or the inability to

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deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice as of the date of such rejection, refusal or inability to deliver.

     Section 8.8 Assignment; Binding Effect. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties, except that Merger Sub may assign, in its sole discretion, any of or all of its rights, interest and obligations under this agreement to Parent or to any direct or indirect wholly-owned subsidiary of Parent, but no such assignment shall relieve Merger Sub of its obligations hereunder. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Parent shall cause Merger Sub, and any assignee thereof, to perform its obligations under this Agreement.

     Section 8.9 Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the sole extent of such invalidity or unenforceability without rendering invalid or unenforceable the remainder of such term or provision or the remaining terms and provisions of this Agreement in any jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

     Section 8.10 Entire Agreement; No Third-Party Beneficiaries. This Agreement (including the exhibits and schedules hereto), the Guarantee and the Confidentiality Agreement constitute the entire agreement, and supersede all other prior agreements and understandings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof and thereof and, except for the provisions of Article II (which, from and after the Effective Time, shall be for the benefit of holders of the Shares and Company Options as of the Effective Time), Sections 1A.1(d) and (e) (which, from and after the Acceptance Date, shall be for the benefit of holders whose Shares are accepted for payment in the Offer or in any subsequent offering period), and Section 5.9 (which shall be for the benefit of the Indemnified Parties), is not intended to and shall not confer upon any person other than the parties hereto any rights or remedies hereunder.

     Section 8.11 Amendments; Waivers. At any time prior to the Effective Time, any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by the Company, Parent and Merger Sub, or in the case of a waiver, by the party against whom the waiver is to be effective; provided, however, that after receipt of the Company Stockholder Approval, if applicable, if any such amendment or waiver shall by applicable Law or in accordance with the rules and regulations of the New York Stock Exchange require further approval of the stockholders of the Company, the effectiveness of such amendment or waiver shall be subject to the approval of the stockholders of the Company. Notwithstanding the foregoing, no failure or delay by the Company or Parent in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder.

     Section 8.12 Headings. Headings of the Articles and Sections of this Agreement are for convenience of the parties only and shall be given no substantive or interpretive effect

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whatsoever. The table of contents to this Agreement is for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

     Section 8.13 Interpretation. When a reference is made in this Agreement to an Article or Section, such reference shall be to an Article or Section of this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. Each of the parties has participated in the drafting and negotiation of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement.

     Section 8.14 No Recourse. This Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto or the Guarantor and no past, present or future Affiliate, director, officer, employee, incorporator, member, manager, partner, stockholder, agent, attorney or representative of any party hereto (other than the Guarantor) shall have any liability for any obligations or liabilities of the parties to this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby. Notwithstanding anything to the contrary contained herein, the Company agrees that to the extent it has incurred damages in connection with this Agreement, the maximum liability of the Guarantor, directly or indirectly, shall be limited to the Cap under the Guarantee.

     Section 8.15 Definitions. References in this Agreement to specific laws or to specific provisions of laws shall include all rules and regulations promulgated thereunder. Any statute defined or referred to herein or in any agreement or instrument referred to herein shall mean such statute as from time to time amended, modified or supplemented, including by succession of comparable successor statutes. For purposes of this Agreement, the following terms (as capitalized below) will have the following meanings when used herein:

          “1993 Plan” has the meaning set forth in Section 3.2(a).

          “1998 Plan” has the meaning set forth in Section 3.2(a).

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          “2002 Plan” has the meaning set forth in Section 3.2(a).

          “2004 Plan” has the meaning set forth in Section 3.2(a).

          “Acceptance Date” has the meaning set forth in Section 1A.1(e).

          “Action” has the meaning set forth in Section 5.9(b).

          “affiliates” means, with respect to any person, any other person which, directly or indirectly, controls, or is controlled by, or is under common control with, such person. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.

          “Affiliate Transaction” has the meaning set forth in Section 3.23.

          “Agreement” has the meaning set forth in the Preamble.

          “Alternative Proposal” has the meaning set forth in Section 5.3(g).

          “Board of Directors” has the meaning set forth in the Recitals.

          “Book-Entry Shares” has the meaning set forth in Section 2.2(a).

          “Breach Fact” has the meaning set forth in Section 7.3(b).

          “Business Day” has the meaning set forth in Section 1A.1(d).

          “Cancelled Shares” has the meaning set forth in Section 2.1(b).

          “Cap” has the meaning set forth in the Guarantee.

          “Certificate of Merger” has the meaning set forth in Section 1.3.

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          “Certificates” has the meaning set forth in Section 2.2(a).

          “Citigroup” has the meaning set forth in Section 3.19.

          “Closing” has the meaning set forth in Section 1.2.

          “Closing Date” has the meaning set forth in Section 1.2.

          “Code” has the meaning set forth in Section 2.2(b)(iii).

          “Company” has the meaning set forth in the Preamble.

          “Company Benefit Plans” has the meaning set forth in Section 3.10(a).

          “Company Disclosure Letter” has the meaning set forth in Article III.

          “Company Employees” has the meaning set forth in Section 5.5(a).

          “Company Financing Expenses” has the meaning set forth in Section 5.11(b).

          “Company Material Adverse Effect” has the meaning set forth in Section 3.1(c).

          “Company Meeting” has the meaning set forth in Section 5.4(b).

          “Company Note Repurchase Expenses” has the meaning set forth in Section 5.14.

          “Company Permits” has the meaning set forth in Section 3.8(b).

          “Company SEC Documents” has the meaning set forth in Section 3.5(a).

          “Company Specified Contracts” has the meaning set forth in Section 3.21(a).

          “Company Stock Options” has the meaning set forth in Section 2.3(a).

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          “Company Stock Plans” has the meaning set forth in Section 2.3(a).

          “Company Stockholder Approval” has the meaning set forth in Section 3.20.

          “Confidentiality Agreement” has the meaning set forth in Section 5.2(b).

          “Credit Agreement” means the Credit Agreement, dated as of November 30, 2000, among the Company, Bank of America, N.A., Bank One, Texas, N.A., First Union National Bank, Banc of America Securities LLC and the other lender parties thereto.

          “Debt Commitment Letter” has the meaning set forth in Section 4.5.

          “Debt Financing” has the meaning set forth in Section 4.5.

          “DGCL” has the meaning set forth in Section 1A.2(a).

          “Dissenting Shares” has the meaning set forth in Section 2.1(d).

          “Effective Time” has the meaning set forth in Section 1.3.

          “Employees” has the meaning set forth in Section 3.16.

          “End Date” has the meaning set forth in Section 7.1(b).

          “Environmental Law” has the meaning set forth in Section 3.9(a).

          “Equity Commitment Letter” has the meaning set forth in Section 4.5.

          “ERISA” has the meaning set forth in Section 3.10(a).

          “ERISA Affiliate” has the meaning set forth in Section 3.10(c).

          “Exchange Act” has the meaning set forth in Section 1A.1(a).

          “Exchange Fund” has the meaning set forth in Section 2.2(a).

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          “Existing Confidentiality Agreement” means the confidentiality agreement by and among the Company, Heyman Investment Associates Limited Partnership and Building Materials Corporation of America, dated as of December 29, 2006.

          “Expenses” has the meaning set forth in Section 7.3(a).

          “Expiration Date” has the meaning set forth in Section 1A.1(d).

          “Financing” has the meaning set forth in Section 4.5.

          “Financing Commitments” has the meaning set forth in Section 4.5.

          “GAAP” means United States generally accepted accounting principles.

          “Governmental Entity” has the meaning set forth in Section 3.4(b).

          “Guarantee” has the meaning set forth in Section 4.6.

          “Guarantor” has the meaning set forth in Section 4.6.

          “Hazardous Substance” has the meaning set forth in Section 3.9(b).

          “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

          “Indemnified Party” has the meaning set forth in Section 5.9(b).

          “Independent Directors” has the meaning set forth in Section 1A.3.

          “Information Memorandum” has the meaning set forth in Section 4.10.

          “Intellectual Property” has the meaning set forth in Section 3.17.

          “Interest Rate” has the meaning set forth in Section 7.3(d).

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          “knowledge” means (a) with respect to Parent, the knowledge of the executive officers of Parent after reasonable inquiry and (b) with respect to the Company, the knowledge of the individuals listed on Section 8.15(b) of the Company Disclosure Letter after reasonable inquiry.

          “Law” or “Laws” has the meaning set forth in Section 3.8(a).

          “Lien” means a right of termination, cancellation or acceleration of any material obligation or to the loss of a material benefit under any loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, lease, agreement, contract, instrument, permit, concession, franchise, right or license binding upon the Company or any of the Company’s Subsidiaries or result in the creation of any liens, claims, mortgages, encumbrances, pledges, security interests, equities or charges of any kind.

          “Merger” has the meaning set forth in the Recitals.

          “Merger Consideration” has the meaning set forth in Section 2.1(a).

          “Merger Sub” has the meaning set forth in the Preamble.

          “Minimum Condition” has the meaning set forth in Annex III.

          “Multiemployer Plan” has the meaning set forth in Section 3.10(a).

          “New Financing Commitments” has the meaning set forth in Section 5.11(a).

          “New Plans” has the meaning set forth in Section 5.5(b).

          “Offer” has the meaning set forth in Section 1A.1(a).

          “Offer Documents” has the meaning set forth in Section 1A.1(c).

          “Offer to Purchase” has the meaning set forth in Section 1A.1(c).

          “Old Plans” has the meaning set forth in Section 5.5(b).

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          “Option and Stock-Based Consideration” has the meaning set forth in Section 2.3(c).

          “Option Consideration” has the meaning set forth in Section 2.3(a).

          “Parent” has the meaning set forth in the Preamble.

          “Parent Approvals” has the meaning set forth in Section 4.2(b).

          “Parent Disclosure Letter” has the meaning set forth in Article IV.

          “Parent Material Adverse Effect” has the meaning set forth in Section 4.1.

          “Parent Representatives” has the meaning set forth in Section 5.2(a).

          “Parent Termination Fee” has the meaning set forth in Section 7.3(b).

          “Paying Agent” has the meaning set forth in Section 2.2(a).

          “Per Share Amount” has the meaning set forth in the Recitals.

          “Performance Shares” has the meaning set forth in Section 2.3(c).

          “Permitted Lien” means a Lien (A) for Taxes or governmental assessments, charges or claims of payment not yet due or being contested in good faith and, in each case, for which adequate accruals or reserves have been established in accordance with GAAP, (B) which is a carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar lien arising in the ordinary course of business, (C) which is a zoning, entitlement or other land use or environmental regulation by any Governmental Entity, (D) which is disclosed on the most recent consolidated balance sheet of the Company or notes thereto (or securing liabilities reflected on such balance sheet) or (E) which was incurred in the ordinary course of business since the date of the most recent consolidated balance sheet of the Company.

          “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity, group (as such term is used in Section 13 of the Exchange Act) or organization, including, without limitation, a Governmental Entity, and any permitted successors and assigns of such person.

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          “Preferred Stock” has the meaning set forth in Section 3.2(a).

          “Prior Merger Agreement” has the meaning set forth in the Recitals.

          “Private Placement Notes” means the Company’s (i) 6.28% Senior Notes due November 15, 2014, (ii) 4.69% Senior Notes due July 15, 2007, (iii) 6.99% Senior Notes due June 15, 2009 and (iv) 7.49% Senior Notes due June 15, 2012.

          “Proxy Statement” has the meaning set forth in Section 3.13(b).

          “Qualifying Transaction” has the meaning set forth in Section 7.3(a).

          “Recommendation” has the meaning set forth in Section 3.4(a).

          “Representatives” has the meaning set forth in Section 5.3(a).

          “Restricted Shares” has the meaning set forth in Section 2.3(b).

          “Rights” means the preferred stock purchase rights outstanding pursuant to the Rights Agreement.

          “Rights Agreement” has the meaning set forth in the Recitals.

          “Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended.

          “Schedule 14D-9” has the meaning set forth in Section 1A.2(b).

          “Schedule TO” has the meaning set forth in Section 1A.1(c).

          “SEC” means the Securities and Exchange Commission.

          “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

          “Share” has the meaning set forth in the Recitals.

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          “Short Form Merger” has the meaning set forth in Section 1.8.

          “Significant Subsidiary” has the meaning set forth in Section 3.3(a).

          “Special Committee” has the meaning set forth in the Recitals.

          “Specified Approvals” has the meaning set forth in Section 3.4(b).

          “Subsidiaries” means, with respect to any party, any corporation, partnership, association, trust or other form of legal entity of which (i) more than 50% of the outstanding voting securities are on the date hereof directly or indirectly owned by such party, or (ii) such party or any Subsidiary of such party is a general partner (excluding partnerships in which such party or any Subsidiary of such party does not have a majority of the voting interests in such partnership).

          “Superior Proposal” has the meaning set forth in Section 5.3(h).

          “Surviving Corporation” has the meaning set forth in Section 1.1.

          “Takeover Laws” has the meaning set forth in Section 1A.2(a).

          “Tax Return” has the meaning set forth in Section 3.15(j).

          “Taxes” has the meaning set forth in Section 3.15(j).

          “Tender Offer Conditions” has the meaning set forth in Section 1A.1(a).

          “Termination Date” has the meaning set forth in Section 5.1(a).

          “Termination Fee” has the meaning set forth in Section 7.3(a).

          “Top-Up Option” has the meaning set forth in Section 1A.4(a).

          “Top-Up Option Shares” has the meaning set forth in Section 1A.4(a).

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          “UBS” has the meaning set forth in Section 3.19.

          “WARN Act” has the meaning set forth in Section 3.16.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.

CGEA HOLDINGS, INC.
By:	/s/ Glenn A. Youngkin
	Name:	Glenn A. Youngkin
	Title:	President
CGEA INVESTOR, INC.
By:	/s/ Glenn A. Youngkin
	Name:	Glenn A. Youngkin
	Title:	President
ELKCORP
By:	/s/ Thomas Karol
	Name:	Thomas Karol
	Title:	CEO

Annex III

     Conditions to the Offer. Notwithstanding any other provision of the Offer, Merger Sub shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange Act (relating to Parent’s obligation to pay for or return tendered Shares promptly after termination or withdrawal of the Offer), pay for, and (subject to any such rules or regulations) may, to the extent expressly permitted by this Agreement, delay the acceptance for payment of any tendered Shares if (i) there shall not have been validly tendered and not withdrawn prior to the expiration of the Offer a number of Shares which represents more than one-half of the number of Shares outstanding on a fully diluted basis (which shall mean, for purposes of this Annex III, as of any time, the number of Shares then outstanding, together with all Shares then issuable pursuant to outstanding Company Stock Options and Performance Shares immediately prior to the expiration of the Offer which in the case of Performance Shares shall be deemed to be earned at the maximum target level set forth in the applicable Company Stock Plan and applicable award agreement assuming that the Offer is completed, in each case whether vested or unvested) (the “Minimum Condition”) or (ii) at any time after the date of this Agreement and before the expiration of the Offer, any of the following events shall occur and be continuing:

     (a) a Governmental Entity of competent jurisdiction shall have enacted issued or entered any restraining order, preliminary or permanent injunction or similar order or legal restraint or prohibition which remains in effect that enjoins or otherwise prohibits consummation of the Offer or the Merger;

     (b) this Agreement shall have been terminated by the Company, Merger Sub or Parent in accordance with its terms;

     (c) (i) any of the representations and warranties of the Company set forth in Section 3.2(a) and (b) and 3.20 shall not be true and correct in all respects (except, in the case of Sections 3.2(a) and (b), for such inaccuracies as are de minimis in the aggregate), in each case at and as of the date of this Agreement and at and as of the Expiration Date as though made at and as of the Expiration Date (except to the extent expressly made as of an earlier date, in which case as of such date), or (ii) any of the other representations and warranties of the Company set forth herein shall not be true and correct in each case at and as of the date of this Agreement and at and as of the Expiration Date as though made at and as of the Expiration Date (except to the extent expressly made as of an earlier date, in which case as of such date), except where the failure of such representations and warranties to be so true and correct would not have, individually or in the aggregate, a Company Material Adverse Effect;

     (d) the Company shall not have in all material respects performed all obligations and complied with all covenants required by this Agreement to be performed or complied with by it

prior to the Expiration Date and such failure to perform shall not have been cured prior to the Expiration Date; or

     (e) any Company Material Adverse Effect.

     Subject to the terms of this Agreement, the foregoing conditions are for the sole benefit of Merger Sub and may be asserted by Merger Sub regardless of the circumstances (including any action or inaction by Parent or Merger Sub, other than action or inaction in breach of this Agreement, including the failure to have used such efforts as may be required by Section 5.6) giving rise to any such conditions and may be waived by Merger Sub in whole or in part at any time and from time to time, in each case except for the Minimum Condition, in the exercise of the reasonable good faith judgment of Merger Sub and subject to the terms of this Agreement, including, without limitation, Section 1A.1(b). The failure by Merger Sub at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time.

EX-99.(D)(1)(B) 19 d42209exv99wxdyx1yxby.htm AMENDED AND RESTATED CONFIDENTIALITY AGREEMENT

Exhibit (d)(1)(B)

As of October 11, 2006

CONFIDENTIAL

CGEA Holdings, Inc.
CGEA Investor, Inc.
Carlyle Investment Management L.L.C.
1001 Pennsylvania Ave, NW
Suite 220 South
Washington DC 20004

Amended and Restated Confidentiality Agreement

     Ladies and Gentlemen:

     Reference is hereby made to (i) the Confidentiality Agreement, dated October 11, 2006 (the “Confidentiality Agreement”), between ElkCorp (the “Company”) and Carlyle Investment Management L.L.C. and (ii) the Agreement and Plan of Merger, dated as of December 18, 2006 (the “Merger Agreement”), by and among CGEA Holdings, Inc. (“Parent”), CGEA Investor, Inc. (“Merger Sub”) and the Company. In consideration of the consent of Parent and Merger Sub to the Company’s request to enter into that Confidentiality Agreement, dated December 29, 2006, by and among the Company, Heyman Investment Associates Limited Partnership and Building Materials Corporation of America having the terms set forth in such agreement, the Company and you hereby agree to amend and restate the Confidentiality Agreement as set forth in this letter agreement. This letter agreement amends and restates the Confidentiality Agreement and as so amended and restated shall be deemed to be the Confidentiality Agreement referred to in Sections 5.2(b) and Section 8.10 of the Merger Agreement.

     You have requested information from the Company, in connection with your consideration of a possible negotiated transaction between the Company and you (the “Transaction”) pursuant to the Merger Agreement and any potential New Offer (as such term is defined below). As a condition to furnishing such information to you, you agree, as set forth below, to treat confidentially any information (whether prepared by the Company, its Representatives or otherwise, whether in oral, written, electronic or other form, and whether prepared before, on or after the date hereof) that the Company or its Representatives, furnish (or have furnished) to you or your Representatives (such information being collectively referred to herein as the “Evaluation Material”) and to take or abstain from taking certain other actions set forth herein. The term “Evaluation

Material” shall be deemed to include, without limitation, notes, analyses, compilations, summaries, data, studies, interpretations, forecasts, records, memoranda or other documents or information prepared by you or your Representatives which contain, reflect or are based on, in whole or in part, any Evaluation Material. The term “Evaluation Material” shall not be deemed to include information that (i) is already in your possession, provided that such information is not known by you to be subject to another confidentiality agreement with or other obligation of secrecy to the Company or another party, (ii) becomes generally available to the public other than as a result of a disclosure by you or your Representatives, (iii) becomes available to you on a non-confidential basis from a source other than the Company or its Representatives, provided that you do not have reason to believe that such source is bound by a confidentiality agreement with or other obligation of secrecy to the Company or another party, or (iv) you can demonstrate was independently developed by you or on your behalf without violation of any of your obligations hereunder and without reference to any Evaluation Material.

     You hereby agree that the Evaluation Material will be used by you or your Representatives solely for the purpose of evaluating a possible acquisition by you of the Company or a New Offer, will not be used in any way directly or indirectly detrimental to the Company, or for any other purpose, and will be kept confidential by you and your Representatives and will not be disclosed by you or any of your Representatives to any other person; provided, however, that any of such information may be disclosed to your Representatives who (i) need to know such information for the sole purpose of evaluating any such possible transaction between the Company and you, (ii) are informed by you of the confidential nature of such information and (iii) agree to keep such information confidential and to be bound by this letter agreement to the same extent as if they were parties hereto. You hereby agree that you will be responsible for any breach of this letter agreement by your Representatives, and that the Company shall be entitled to directly enforce such agreements (it being understood that such responsibility shall be in addition to and not by way of limitation of any right or remedy the Company may have against your Representatives with respect to such breach). You understand that some Evaluation Material deemed competitively sensitive may, and Evaluation Material related to product pricing shall, if provided, be designated for review solely by your outside advisors or by those of your employees whose responsibilities do not include contacting customers or potential customers or the determination of product pricing, and you agree to, and to cause your Representatives to, abide by such designation.

     In addition, without the prior written consent of the Company, you will not, and will cause your Representatives not to, discuss with or offer to any third party (other than Hood Companies, Inc. and its subsidiaries (“Hood”)) an equity participation in a possible transaction or any other form of joint acquisition by you and a third party (other than Hood), or enter into any agreement relating to the foregoing.

2

     In the event that you or your Representatives receive a request to disclose all or any part of the information contained in the Evaluation Material under the terms of a valid and effective subpoena or order issued by a court of competent jurisdiction or by a governmental body or are required by applicable law, rule or regulation to disclose such Evaluation Material in connection with the Merger Agreement or a New Offer (as defined below), you agree (x) in the case of such a request, to (i) to the extent permitted by law, promptly notify the Company in writing of the existence, terms and circumstances surrounding such a request, so that it may seek an appropriate protective order and/or waive your compliance with the provisions of this letter agreement (and, if the Company seeks such an order, to provide such cooperation as the Company shall reasonably request) and (ii) if such protective order or other remedy is not obtained or the Company waives compliance with the provisions of this letter agreement, and if disclosure of such information is required in the opinion of your counsel, who shall be reasonably satisfactory to the Company, disclose only that portion of the Evaluation Material that is legally required to be disclosed in the opinion of such counsel and exercise your reasonable best efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to such of the disclosed information which the Company so designates, and (y) in the case of such a requirement to promptly notify the Company of any such required disclosure and to reasonably cooperate with the Company to agree on the nature of such disclosure; provided, that in the absence of such an agreement, you may disclose such of the Evaluation Material as would be required in the opinion of your counsel, who shall be reasonably satisfactory to the Company, to be disclosed in a proxy statement of the Company for a merger by an acquiror possessing such Evaluation Material.

     During the course of your evaluation, all inquiries and other communications in connection with a possible negotiated Transaction are to be made directly to Thomas Karol, Chief Executive Officer of the Company, or through UBS Investment Bank (primary contact: Lee Lebrun, 212.821.4269), or Wachtell, Lipton, Rosen & Katz (“WLRK”) (primary contact: Mark Gordon, 212.403.1343). Until the Standstill Termination Date (as defined below) except with the express written permission of the Company, you will not, and will cause your Representatives not to, initiate or maintain contact with any officer (other than Mr. Karol or Mr. Richard Nowak, the Chief Operating Officer of the Company), employee, agent, or affiliate of the Company or any of its subsidiaries regarding the Company or any of its subsidiaries or their respective operations, assets, prospects or finances, or seek any information from such person, in each case in connection with a possible Transaction. Subject to your compliance with the restrictions of the next paragraph (when applicable to you), you may contact directors of the Company in connection with a possible Transaction.

     You hereby acknowledge that the Evaluation Material is being furnished to you in consideration of your agreement, and you hereby agree, subject to the following paragraph, that from the date hereof until the earlier of: (A) six (6) months from the date

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of this letter agreement or (B) if the Company advances the Company Proposal Date (as defined below) to a date that is earlier than six months from the date of this letter agreement, the fifth business day prior to such new, earlier Company Proposal Date, increasing the conditions to closing or extending the time for performance (such earlier date, the “Standstill Termination Date”), unless specifically invited in writing by the Company, neither you nor any of your Representatives will in any manner, directly or indirectly: (a) effect or seek, offer or propose (whether publicly or otherwise) to effect, or participate in, facilitate or encourage any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, (i) any acquisition of any securities (or beneficial ownership thereof), or rights or options to acquire any securities (or beneficial ownership thereof), or any assets, indebtedness or businesses of the Company or any of its subsidiaries, other than acquisitions not in excess of, in the aggregate, 2% of such securities, (ii) any tender offer or exchange offer, merger or other business combination involving the Company, any of the subsidiaries or assets of the Company or the subsidiaries constituting a significant portion of the consolidated assets of the Company and its subsidiaries, (iii) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or any of its subsidiaries, or (iv) any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission) or consents to vote any voting securities of the Company, including soliciting consents or taking other action with respect to the calling of a special meeting of the Company’s shareholders; (b) form, join or in any way participate in a “group” (as defined under the Exchange Act) with respect to the Company; (c) otherwise act, alone or in concert with others, to seek representation on or to control or influence the management, Board of Directors or policies of the Company or to obtain representation on the Board of Directors of the Company; (d) disclose or direct any person to disclose, any intention, plan or arrangement inconsistent with the foregoing; (e) take any action that could reasonably be expected to result in a request to disclose all or any part of the information contained in the Evaluation Material by a court of competent jurisdiction or by a governmental body; or (f) advise, assist or encourage or direct any person to advise, assist or encourage any other persons in connection with any of the foregoing. You also agree during such period not to request the Company or any of its Representatives, directly or indirectly to amend or waive any provision of this paragraph (including this sentence). Your association with Hood in connection with your consideration of a transaction shall not be deemed to violate the terms of this paragraph. For the avoidance of doubt, this standstill provision shall not apply to any investment fund focused on high yield or fixed income securities managed or sponsored by you unless you disclose Evaluation Material to such investment fund. The Company has publicly announced that advance notice of any shareholder proposals for business to be conducted at the Company’s 2007 annual meeting of stockholders must be given by a proposing shareholder by August 1, 2007. Such deadline is referred to herein as the “Company Proposal Date”.

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     The preceding paragraph notwithstanding, (1) you will not be deemed to be in breach of the preceding paragraph by virtue of any action taken by you that is permitted under the Merger Agreement or by the announcement, commencement, maintenance, amendment and/or extension by you or your affiliates of an acquisition offer, whether by way of a tender or exchange offer, merger or otherwise (a “New Offer”); provided that the terms of the New Offer (including any extension or amendment thereof) shall in no event (A) provide for a per share consideration that is less than the Merger Consideration or (B) otherwise contain terms and conditions that in the aggregate are materially less favorable to the Company’s shareholders than the terms and conditions set forth in the Merger Agreement, provided that an extension of the expiration date of a New Offer shall not be deemed to be an adverse change; and (2) you will not be deemed to be in breach of the preceding paragraph by virtue of the taking of any action otherwise prohibited by such provisions so long as any such action is taken during the time that such New Offer is pending and open.

     In consideration of the Evaluation Material being furnished to you, you also hereby agree that, for the period of two years from the date hereof, neither you nor any of your Representatives will solicit for employment, or employ, any of the officers or employees of the Company or its affiliates without obtaining the prior written consent of the Company; provided, however, that you and your Representatives may engage in general solicitations (and employ pursuant to such solicitations) for employees in the ordinary course of business and consistent with past practice and that you and your Representatives may solicit or employ any officer or employee of the Company or its affiliates six months after such person’s employment with the Company or its affiliate, as the case may be, has terminated.

     You understand that, except as set forth in the Merger Agreement, neither the Company nor any of its Representatives have made or make any representation or warranty as to the accuracy or completeness of the Evaluation Material and that nothing contained in any discussions between the Company or any of its Representatives and you or any of your Representatives shall be deemed to constitute a representation or warranty. You agree that neither the Company nor its Representatives shall have any liability to you or any of your Representatives resulting from the use or content of the Evaluation Material or from any action taken or any inaction occurring in reliance on the Evaluation Material, except as may be included in the Merger Agreement or any other definitive agreement which provides for any transaction between the Company and you.

     At the request of the Company in its sole discretion and for any reason, or on your own initiative if you decide not to proceed with a possible transaction, you will promptly (and in no event later than five business days after the request therefor) deliver to the Company or destroy (including, to the extent practicable, expunging all such Evaluation Material from any computer, word processor or other device containing such information) all Evaluation Material (whether prepared by the Company or its

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Representatives), including all documents, memoranda, notes and other writings whatsoever prepared by you or your Representatives based on the information in the Evaluation Material, and cause your Representatives to do the same and you shall provide the Company with written confirmation of destruction. Notwithstanding the foregoing, you and your Representatives may retain one copy if and to the extent required in order to satisfy any law, rule or regulation to which you are subject. The return or destruction of the Evaluation Material notwithstanding, you and your Representatives will continue to be bound by your obligations of confidentiality and other obligations hereunder.

     You hereby acknowledge that you are aware, and that you will advise your Representatives who are informed as to the matters which are the subject of this letter agreement, that the United States securities laws prohibit any person who has received from an issuer material, non-public information concerning the matters which are the subject of this letter agreement from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.

     It is further understood and agreed that no failure or delay by a party in exercising any right, power or privilege under this letter agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder. This letter agreement and the Merger Agreement represent the entire understanding of the parties with respect to the matters referred to in this letter agreement and supersede all prior understandings, written or oral, between the parties with respect to such matters. The agreements set forth in this letter agreement may be modified or waived only by a separate writing between the Company and you expressly so modifying or waiving such agreements.

     The parties hereto acknowledge that money damages are an inadequate remedy for breach of this letter agreement because of the difficulty of ascertaining the amount of damage that will be suffered by the Company in the event that this agreement is breached. Therefore, you agree that the Company may obtain specific performance of this agreement and injunctive or other equitable relief as a remedy for any such breach, and you further waive any requirement for the securing or posting of any bond in connection with any such remedy. Such remedy shall not be deemed to be the exclusive remedy for your breach of this letter agreement, but shall be in addition to all other remedies available at law or equity to the Company. If any term, provision, covenant or restriction of this letter agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this letter agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

     As used in this letter agreement, (i) the term “person” will be interpreted broadly to include, without limitation, the media (electronic, print or otherwise), the Internet, any governmental representative or authority or any corporation, company, group,

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partnership, limited liability company, other entity or individual, (ii) the term “Representatives,” used with respect to a person, shall include its affiliates and the directors, officers, employees, representatives, agents, attorneys, accountants, financial advisors and other advisors, and banks and other debt financing sources of or to such person or its affiliates, but, without the prior written consent of the Company, shall exclude any potential source of equity capital (other than Hood), (iii) the term “affiliate” when used with respect to a person, shall have the meaning given to it in Rule 12b-2 under the Exchange Act, (iv) the term “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and (v) the term “change of control” shall mean (a) a sale or transfer of all or substantially all of the assets or stock of the Company or (b) a merger or other business combination to which the Company is a party, except for a merger or other business combination where the Company is the surviving corporation and, after giving effect to such merger, the holders of the Company’s outstanding capital stock (on a fully-diluted basis) immediately prior to the merger will own, immediately following the merger, capital stock holding a majority of the voting power of the Company. The parties hereto agree that for purposes of this letter agreement the term “affiliate” or “Representative” shall not include any investment fund managed or sponsored by you or any portfolio investment of any investment funds of Carlyle Investment Management, L.L.C. or any of its affiliates or any director, officer, employee or agent of any portfolio investment unless any director, officer, employee or agent of that portfolio investment is provided access to the Evaluation Material or Transaction Information.

     This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the principles of conflict of laws thereof. You irrevocably submit to (i) the exclusive jurisdiction of New York state courts and any federal court sitting in the City and State of New York for purposes of any suit, action or other proceeding arising out of this letter agreement, or of the transactions contemplated hereby, that is brought by or against you, and (ii) the exclusive venue of such suit, action or proceeding in the City and State of New York.

     Except as provided in the following sentence, this letter agreement and all obligations of the parties hereunder shall terminate two (2) years from the date hereof. Notwithstanding anything in this letter agreement to the contrary, you agree that all of your obligations will survive and continue: (a) with respect to Evaluation Material other than Trade Secret Technology Information, for a period of three (3) years from the date hereof, and (b) with respect to Trade Secret Technology Information for so long as such information retains its status as a trade secret. For purposes of this agreement, “Trade Secret Technology Information” means Evaluation Material without regard to form which is not commonly known by or available to the public and which information (i) relates to proprietary inventions, know-how, technology, processes or products of the Company, (ii) derives economic value, actual or potential, from not being known to and not being readily ascertainable by proper means by other persons who can obtain

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economic value from its disclosure or use, (iii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy, and (iv) is designated as a trade secret by the Company to you by labeling such written information “trade secret” or designating oral information or information conveyed by observation as “trade secret” in writing within thirty (30) days after disclosure of the trade secret to you.

[Signature page follows]

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     If you are in agreement with the foregoing, please so indicate by signing and returning one copy of this letter agreement, which will constitute our agreement with respect to the matters set forth herein.

Very truly yours, ElkCorp
By:	/s/ Thomas D. Karol
	Name:	Thomas D. Karol
	Title:	Chairman of the Board and Chief Executive Officer

Confirmed and Agreed to:

Carlyle Investment Management LLC
By:	/s/ Sameer Bhargava
	Name:	Sameer Bhargava
	Title:	Principal
CGEA Holdings, Inc.
By:	/s/ Sameer Bhargava
	Name:	Sameer Bhargava
	Title:	Vice President
CGEA Investor, Inc.
By:	/s/ Sameer Bhargava
	Name:	Sameer Bhargava
	Title:	Vice President

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EX-99.(D)(1)(C) 20 d42209exv99wxdyx1yxcy.htm AMENDED AND RESTATED GUARANTEE FROM CARLYLE PARTNERS IV, L.P.

Exhibit (d)(1)(C)

AMENDED AND RESTATED GUARANTEE
OF
CARLYLE PARTNERS IV, L.P.

     GUARANTEE, dated as of January 15, 2007 (this “Guarantee”), by Carlyle Partners IV, L.P. (the “Guarantor”), in favor of ElkCorp, a Delaware corporation (the “Company”).

     1. GUARANTEE. To induce the Company to enter into that certain Amended and Restated Agreement and Plan of Merger, dated as of January 15, 2007 (as amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among the Company, CGEA Holdings, Inc. a Delaware corporation (“Parent”), and CGEA Investor Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will commence a tender offer (the “Offer”) to purchase all outstanding shares of common stock, par value $1.00 per share, of the Company, and following the consummation of the Offer, merge with and into the Company, the Guarantor absolutely, unconditionally and irrevocably guarantees to the Company, the due and punctual observance, payment, performance and discharge of the obligation of Parent and Merger Sub to pay (a) the Parent Termination Fee pursuant to Section 7.3 of the Merger Agreement, (b) the Company Financing Expenses, and (c) the Company Note Repurchase Expenses (as such terms are defined in the Merger Agreement) to the Company (the “Obligations”); provided that notwithstanding anything to the contrary set forth herein, the maximum amount payable by the Guarantor under this Guarantee shall not exceed $35 million plus any amount payable pursuant to Section 11 of this Guarantee (the “Cap”), it being understood that this Guarantee may not be enforced without giving effect to the Cap. This Amended and Restated Guarantee amends and restates the Guarantee dated as of December 18, 2006 among the parties hereto and as so amended and restated shall be deemed to be the Guarantee referred to in Section 4.6 of the Merger Agreement.

     2. NATURE OF GUARANTEE. The Company shall not be obligated to seek payment of the Obligations from Parent or Merger Sub or file any claim relating to the Obligations in the event that Parent or Merger Sub becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Company to seek such payment or to so file shall not affect the Guarantor’s obligations hereunder. In the event that any payment to the Company in respect of any Obligations is rescinded or must otherwise be returned for any reason whatsoever, the Guarantor shall remain liable hereunder with respect to such Obligations as if such payment had not been made. This is an unconditional guarantee of payment and not of collectibility. The Guarantor reserves the right to assert defenses which Parent or Merger Sub may have to payment of any Obligations that arise under the terms of the Merger Agreement.

     3. CHANGES IN OBLIGATIONS, CERTAIN WAIVERS. The Guarantor agrees that the Company may at any time and from time to time, without notice to or further consent of the Guarantor, extend the time of payment of any of the Obligations, and may also make any agreement with Parent or Merger Sub for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between the Company and Parent or Merger Sub or any such other Person without in any way impairing or affecting this Guarantee. The Guarantor agrees that the obligations of the Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (a) the failure of the Company to assert any claim or demand or to enforce any right or remedy against Parent or Merger Sub or any other entity or person liable with respect to any of the Obligations; (b) any change in the time, place or manner of payment of any of the Obligations or any rescission, waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of the Offer, the Merger Agreement or any other agreement evidencing, securing or otherwise executed in connection with any of the Obligations; (c) the addition, substitution or release of any other entity or person liable with respect to any of the Obligations; (d) any change in the corporate existence, structure or ownership of Parent or Merger Sub or any other entity or person liable with respect to any of the Obligations; (e) any insolvency, bankruptcy, reorganization, or other similar proceeding affecting Parent or Merger Sub or any other entity or person liable with respect to any of the Obligations; (f) the existence of any claim, set-off or other rights which the Guarantor may have at any time against Parent, Merger Sub or the Company, whether in connection with the Obligations or otherwise; or (g) the adequacy of any other means the Company may have of obtaining payment of the Obligations. To the fullest extent permitted by law, the Guarantor hereby expressly waives any and all rights or defenses arising by reason of any law which would otherwise require any election of remedies by the Company. The Guarantor waives promptness, diligence, notice of the acceptance of this Guarantee and of the Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and protest, notice of any Obligations incurred and all other notices of any kind (except for notices to be provided to Parent and Merger Sub in accordance with Section 8.7 of the Merger Agreement), all defenses which may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any right to require the marshalling of assets of the Parent or Merger Sub or any other entity or other person liable with respect to any of the Obligations, and all suretyship defenses generally (other than fraud by the Company or any of its Subsidiaries or defenses to the payment of the Obligations that are available to Parent or Merger Sub under the terms of the Merger Agreement or breach by the Company of this Guarantee). The Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Offer and the Merger Agreement and that the waivers set forth in this Guarantee are knowingly made in contemplation of such benefits. Notwithstanding anything to the contrary contained in this Guarantee, the Company hereby agrees that to the extent Parent and Merger Sub are relieved of their obligations with respect to the Parent Termination Fee,

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the Company Financing Expenses or the Company Note Repurchase Expenses, the Guarantor shall be similarly relieved of its Obligations under this Guarantee but only to the same extent.

     The Guarantor hereby unconditionally and irrevocably waives, and agrees not to exercise, any rights that it may now have or hereafter acquire against Parent or Merger Sub that arise from the existence, payment, performance, or enforcement of the Guarantor’s obligations under or in respect of this Guarantee, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Company against Parent or Merger Sub, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from Parent or Merger Sub, directly or indirectly, in cash or other property or by setoff or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Obligations and any amounts payable pursuant to Section 11 of this Guarantee shall have been paid in full in cash. If any amount shall be paid to the Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in cash of the Obligations and any amounts payable pursuant to Section 11 of this Guarantee, such amount shall be received and held in trust for the benefit of the Company, shall be segregated from other property and funds of the Guarantor and shall forthwith be paid or delivered to the Company in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Obligations and any amounts payable pursuant to Section 11 of this Guarantee, in accordance with the terms of the Merger Agreement, whether matured or unmatured, or to be held as collateral for any Obligations or other amounts payable pursuant to Section 11 of this Guarantee thereafter arising.

     4. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the Company to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Company of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power hereunder. Each and every right, remedy and power hereby granted to the Company or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Company at any time or from time to time.

     5. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and warrants that:

     (a) the execution, delivery and performance of this Guarantee have been duly authorized by all necessary action and do not contravene any provision of the Guarantor’s partnership agreement, operating agreement or similar organizational documents or any law, regulation, rule, decree, order, judgment or contractual restriction binding on the Guarantor or its assets;

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     (b) all consents, approvals, authorizations and permits of, filings with and notifications to, any governmental authority necessary for the due execution, delivery and performance of this Guarantee by the Guarantor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental authority or regulatory body is required in connection with the execution, delivery or performance of this Guarantee;

     (c) this Guarantee constitutes a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting creditors’ rights generally, and (ii) general equitable principles (whether considered in a proceeding in equity or at law); and

     (d) Guarantor has the financial capacity to pay and perform its obligations under this Guarantee, and all funds necessary for the Guarantor to fulfill its Obligations under this Guarantee shall be available to the Guarantor for so long as this Guarantee shall remain in effect in accordance with Section 8 hereof.

     6. NO ASSIGNMENT. Neither the Guarantor nor the Company may assign its rights, interests or obligations hereunder to any other person (except by operation of law) without the prior written consent of the Company or the Guarantor, as the case may be; provided, however, that the Guarantor may assign all or a portion of its obligations hereunder to an affiliate or to an entity managed or advised by an affiliate of the Guarantor, provided that no such assignment shall relieve the Guarantor of any liability or obligation hereunder except to the extent actually performed or satisfied by the assignee.

     7. NOTICES. All notices and other communications hereunder shall be in writing in the English language and shall be given (a) on the date of delivery if delivered personally, (b) on the first business day following the date of dispatch if delivered by a nationally recognized next-day courier service, (c) on the fifth business day following the date of mailing if delivered by registered or certified mail (postage prepaid, return receipt requested) or (d) if sent by facsimile or electronic transmission, when transmitted and receipt is confirmed. All notices to the Guarantor hereunder shall be delivered as set forth below:

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Attention:	Glenn A. Youngkin
Address:	Carlyle Partners IV, L.P.
	c/o The Carlyle Group
	1001 Pennsylvania Avenue, NW
	Suite 220 South
	Washington, DC 20004-2505
Facsimile No.:	(202) 347-1818
with a copy to:
Attention:	Paul S. Bird
Address:	Debevoise & Plimpton LLP
	919 Third Avenue
	New York, NY 10022
Facsimile No.:	(212) 909-6836

or to such other address or facsimile number as the Guarantor shall have notified the Company in a written notice delivered to the Company in accordance with the Merger Agreement. All notices to the Company hereunder shall be delivered as set forth in the Merger Agreement.

     8. CONTINUING GUARANTEE. This Guarantee shall remain in full force and effect and shall be binding on the Guarantor, its successors and assigns until the Obligations are satisfied in full. Notwithstanding the foregoing, this Guarantee shall terminate and the Guarantor shall have no further obligations under this Guarantee as of the earlier of (i) the Effective Time (as defined in the Merger Agreement) and (ii) the first anniversary of any termination of the Merger Agreement in accordance with its terms, except as to a claim for payment of any Obligation presented by the Company to Parent, Merger Sub or the Guarantor by such first anniversary. Notwithstanding the foregoing, in the event that the Company or any of its affiliates asserts in any litigation or other proceeding that the provisions of Section 1 hereof limiting the Guarantor’s liability to the Cap or the provisions of this Section 8 or Section 9 hereof are illegal, invalid or unenforceable in whole or in part, or asserts any theory of liability against any Affiliate (as hereinafter defined) or, other than its right to recover from Guarantor for up to the amount of the Obligations (subject to the Cap and the other limitations described herein) and other than a suit against Parent or Merger Sub for declaratory relief in connection with obtaining payment hereunder from Guarantor, Parent or Merger Sub, with respect to

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the transactions contemplated by the Offer, the Merger Agreement, then (i) the obligations of the Guarantor under this Guarantee shall terminate ab initio and be null and void, (ii) if the Guarantor has previously made any payments under this Guarantee, it shall be entitled to recover such payments and (iii) neither the Guarantor nor any of its Affiliates shall have any liability to the Company with respect to the transactions contemplated by the Offer, the Merger Agreement or under this Guarantee; provided, however, that if the Guarantor asserts in any litigation or other proceeding that this Guarantee is illegal, invalid or unenforceable in accordance with its terms, then, to the extent the Company prevails in such litigation or proceeding, the Guarantor shall pay on demand all reasonable fees and out of pocket expenses of the Company in connection with such litigation or proceeding.

     9. NO RECOURSE.

     (a) The Company acknowledges that the sole assets of Parent and Merger Sub are cash in a de minimus amount and its rights under the Merger Agreement, and that no additional funds are expected to be contributed to Parent or Merger Sub unless and until the Closing occurs. Notwithstanding anything that may be expressed or implied in this Guarantee or any document or instrument delivered contemporaneously herewith, and notwithstanding the fact that the Guarantor may be a partnership, by its acceptance of the benefits of this Guarantee, the Company acknowledges and agrees that it has no right of recovery against, and no liability shall attach to, the former, current or future stockholders, directors, officers, employees, agents, affiliates, (other than Parent or Merger Sub in connection with a suit for declaratory relief as aforesaid) members, managers, general or limited partners of the Guarantor, Parent or Merger Sub or any former, current or future stockholder, director, officer, employee, general or limited partner, member, manager, affiliate, (other than Parent or Merger Sub in connection with a suit for declaratory relief as aforesaid) of any of the foregoing (collectively, but not including Guarantor, Parent or Merger Sub, each an “Affiliate”), or, other than its right to recover from Guarantor for up to the amount of the Obligations (subject to the Cap and the other limitations described herein) and other than Parent or Merger Sub in connection with a suit for declaratory relief in connection with obtaining payment hereunder from Guarantor, Parent or Merger Sub, through Parent, Merger Sub or otherwise, whether by or through attempted piercing of the corporate, partnership or limited liability company veil, by or through a claim by or on behalf of Parent or Merger Sub against an Affiliate, Guarantor, Parent or Merger Sub (including a claim to enforce the commitment letter dated as of the date hereof from the Guarantor to Parent) arising under, or in connection with, the Offer, the Merger Agreement or the transactions contemplated thereby or otherwise relating thereto, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable law, or otherwise. The Company hereby covenants and agrees that it shall not institute, directly or indirectly, and shall cause its respective affiliates not to institute, any proceeding or bring any other claim arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby or

6

otherwise relating thereto, against an Affiliate or, other than its right to recover from Guarantor for up to the amount of the Obligations (subject to the Cap and the other limitations described herein) and other than Parent or Merger Sub in connection with a suit for declaratory relief in connection with obtaining payment hereunder from Guarantor, Parent or Merger Sub.

     (b) Recourse against the Guarantor under this Guarantee (including a suit against Parent or Merger Sub for declaratory relief in connection with obtaining payment hereunder from Guarantor) shall be the sole and exclusive remedy of the Company against the Guarantor and any of its Affiliates in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby or hereby or otherwise relating thereto or hereto. Nothing set forth in this Guarantee shall confer or give or shall be construed to confer or give to any Person other than the Guarantor and the Company (including any Person acting in a representative capacity) any rights or remedies against any Person other than the Company and the Guarantor as expressly set forth herein.

     (c) For all purposes of this Guarantee, a person shall be deemed to have pursued a claim against another person if such first person brings a legal action against such person, adds such other person to an existing legal proceeding, or otherwise asserts a legal claim of any nature against such person.

     (d) The Company acknowledges that the Guarantor is agreeing to enter into this Guarantee in reliance on the provisions set forth in this Section 9. This Section 9 shall survive termination of this Guarantee.

     10. GOVERNING LAW. This Guarantee shall be governed and construed in accordance with the laws of the State of Delaware applicable to contracts executed in and to be performed in that State. All actions arising out of or relating to this Guarantee shall be heard and determined exclusively in the state or federal courts of the United States of America located in the State of Delaware. The parties hereto hereby (a) submit to the exclusive jurisdiction of the state or federal courts of the United States of America located in the State of Delaware for the purpose of any action arising out of or relating to this Guarantee brought by any party hereto, and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named court, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, that the venue of the action is improper, or that this Guarantee or the transactions contemplated hereby may not be enforced in or by the above-named court.

     11. EXPENSES OF ENFORCEMENT. The Guarantor agrees to pay all reasonable out-of-pocket fees and expenses (including the reasonable fees and expenses of the Company’s counsel) incurred by the Company in connection with the enforcement of the rights of the Company hereunder; provided, that the Guarantor shall not be liable

7

for expenses of the Company under this Section 11 if it is finally determined by a court of competent jurisdiction that no payment under this Guarantee is due provided, further, that the obligation of the Guarantor under this Section 11 shall not exceed $500,000. The Company agrees to pay all reasonable out-of-pocket fees and expenses (including the reasonable fees and expenses of the Guarantor’s counsel) incurred by the Guarantor in connection with the defense and enforcement of the rights of the Guarantor hereunder; provided, that the Company shall not be liable for any expenses of the Guarantor under this Section 11 if it is finally determined by a court of competent jurisdiction that any payment under this Guarantee is due, and provided, further, that the obligation of the Company hereunder shall not exceed $500,000.

     12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTEE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

     13. COUNTERPARTS. This Guarantee may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

8

     IN WITNESS WHEREOF, the Guarantor and the Company have caused this Guarantee to be executed and delivered as of the date first written above by its officer thereunto duly authorized.

CARLYLE PARTNERS IV, L.P.
By:	TC Group IV, LP., its general partner
	By:  TC Group IV, L.L.C., its general partner
	By:  TC Group, L.L.C., its sole member
	By:  TCG Holdings, L.L.C., its managing member

By:	/s/ Glenn A. Youngkin
	Name:	Glenn A. Youngkin
	Title:	Managing Director

Accepted and Agreed to: ELKCORP
By:	/s/ Thomas Karol
	Name:	Thomas Karol
	Title:	CEO

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EX-99.(D)(1)(A)

Exhibit (d)(1)(A)

AMENDED AND RESTATED

AGREEMENT AND PLAN OF MERGER

by and among

CGEA Holdings, Inc.,

CGEA Investor, Inc.

and

ElkCorp

Dated as of January 15, 2007

Table of Contents

	ARTICLE IA
	THE TENDER OFFER
Section 1A.1.	The Offer	2
Section 1A.2.	Company Action	3
Section 1A.3.	Directors	5
Section 1A.4.	Top-Up Option	6
	ARTICLE I
	THE MERGER
Section 1.1	The Merger	8
Section 1.2	Closing	8
Section 1.3	Effective Time	8
Section 1.4	Effects of the Merger	8
Section 1.5	Certificate of Incorporation and By-laws of the Surviving Corporation	8
Section 1.6	Directors	9
Section 1.7	Officers	9
Section 1.8	Merger Without Meeting of Stockholders	9
	ARTICLE II
	CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES
Section 2.1	Effect on Capital Stock	9
Section 2.2	Exchange of Certificates	11
Section 2.3	Treatment of Stock Options and Other Stock-Based Awards	13
Section 2.4	Further Actions	13
	ARTICLE III
	REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Section 3.1	Qualification, Organization, Subsidiaries, etc	14
Section 3.2	Capital Stock	15
Section 3.3	Subsidiaries; Investments	16
Section 3.4	Corporate Authority Relative to This Agreement; No Violation	16
Section 3.5	Reports and Financial Statements	17
Section 3.6	Internal Controls and Procedures	18
Section 3.7	No Undisclosed Liabilities	18
Section 3.8	Compliance with Law; Permits	19
Section 3.9	Environmental Laws and Regulations	19
Section 3.10	Employee Benefit Plans	20

-i-

Section 3.11	Absence of Certain Changes or Events	22
Section 3.12	Investigations; Litigation	22
Section 3.13	Schedule 14D-9, Offer Documents; Proxy Statement; Other Information	23
Section 3.14	Other Approvals	23
Section 3.15	Tax Matters	24
Section 3.16	Labor Matters	25
Section 3.17	Intellectual Property	25
Section 3.18	Property	26
Section 3.19	Opinion of Financial Advisors	26
Section 3.20	Required Vote of the Company Stockholders	26
Section 3.21	Contracts	27
Section 3.22	Finders or Brokers	27
Section 3.23	Interested Party Transactions	27
Section 3.24	Insurance	28
Section 3.25	Customers and Suppliers	28
	ARTICLE IV
	REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Section 4.1	Qualification, Organization, Subsidiaries, etc	28
Section 4.2	Corporate Authority Relative to This Agreement; No Violation	29
Section 4.3	Investigations; Litigation	30
Section 4.4	Proxy Statement; Schedule 14D-9, Other Information	30
Section 4.5	Financing	30
Section 4.6	Guarantee	31
Section 4.7	Capitalization of Merger Sub	31
Section 4.8	No Vote of Parent Stockholders	31
Section 4.9	Finders or Brokers	31
Section 4.10	No Additional Representations	31
Section 4.11	Certain Arrangements	32
Section 4.12	HSR Filing	32
	ARTICLE V
	COVENANTS AND AGREEMENTS
Section 5.1	Conduct of Business by the Company and Parent	32
Section 5.2	Access	36
Section 5.3	No Solicitation	37
Section 5.4	Filings; Other Actions	39
Section 5.5	Employee Matters	40
Section 5.6	Efforts	41
Section 5.7	Takeover Statute	43
Section 5.8	Public Announcements	43
Section 5.9	Indemnification and Insurance	44

-ii-

Section 5.10	Control of Operations	46
Section 5.11	Financing	46
Section 5.12	Stockholder Litigation	48
Section 5.13	Notification of Certain Matters	48
Section 5.14	Private Placement Notes; Credit Agreement	49
	ARTICLE VI
	CONDITIONS TO THE MERGER
Section 6.1	Conditions to Each Party’s Obligation to Effect the Merger	50
	ARTICLE VII
	TERMINATION
Section 7.1	Termination or Abandonment	50
Section 7.2	Effect of Termination	52
Section 7.3	Termination Fees	52
	ARTICLE VIII
	MISCELLANEOUS
Section 8.1	No Survival of Representations and Warranties	55
Section 8.2	Expenses	55
Section 8.3	Counterparts; Effectiveness	55
Section 8.4	Governing Law	55
Section 8.5	Jurisdiction; Enforcement	55
Section 8.6	Waiver of Jury Trial	56
Section 8.7	Notices	56
Section 8.8	Assignment; Binding Effect	58
Section 8.9	Severability	58
Section 8.10	Entire Agreement; No Third-Party Beneficiaries	58
Section 8.11	Amendments; Waivers	58
Section 8.12	Headings	58
Section 8.13	Interpretation	59
Section 8.14	No Recourse	59
Section 8.15	Definitions	59

ANNEXES

Annex I — Financing Commitments
Annex II — Form of Guarantee
Annex III — Offer Conditions

-iii-

     AMENDED AND RESTATED AGREEMENT AND PLAN OF MERGER, dated as of January 15, 2007 (this “Agreement”), among CGEA Holdings, Inc., a Delaware corporation (“Parent”), CGEA Investor, Inc., a Delaware corporation and a direct wholly owned subsidiary of Parent (“Merger Sub”), and ElkCorp, a Delaware corporation (the “Company”).

WITNESSETH:

     WHEREAS, the parties to this Agreement wish to amend and restate the Agreement and Plan of Merger, dated as of December 18, 2006 (the “Prior Merger Agreement”), by and among Parent, Merger Sub and the Company, as provided for herein.

     WHEREAS, on the terms and subject to the conditions set forth herein, Merger Sub has agreed to commence a tender offer (the “Offer”) to purchase all outstanding shares of common stock, par value $1.00 per share, of the Company, including the associated preferred stock purchase rights (the “Rights”) issued pursuant to the Rights Agreement, dated as of July 7, 1998 (as amended), between the Company and Mellon Investor Services, LLC, as Rights Agent (the “Rights Agreement”) (the shares of common stock, together with the Rights, are referred to collectively as the “Shares”), at a price of $40.50 per Share, net to the seller in cash (such price, or any higher price as may be paid in the Offer in accordance with this Agreement, the “Per Share Amount”).

     WHEREAS, following consummation of the Offer, Merger Sub shall merge with and into the Company (the “Merger”) and each Share that is issued and outstanding immediately prior to the Effective Time (as defined below) (other than Shares owned directly or indirectly by Parent, Merger Sub or the Company, which will be canceled with no consideration issued in exchange therefor) will be canceled and converted into the right to receive cash in an amount equal to the Per Share Amount, all upon the terms and conditions set forth herein.

     WHEREAS, the parties intend that the Company shall survive the Merger as a wholly owned subsidiary of Parent.

     WHEREAS, the board of directors of the Company (the “Board of Directors”), acting upon the recommendation of a special committee of independent directors of the Company (the “Special Committee”), has (i) determined that it is in the best interests of the Company and its stockholders, and declared it advisable, to enter into this Agreement, (ii) approved the execution, delivery and performance of this Agreement and (iii) determined to recommend that the Company’s stockholders accept the Offer and tender their Shares to Merger Sub and, to the extent applicable, to adopt this Agreement.

     WHEREAS, the board of directors of each of Parent and Merger Sub have approved this Agreement and declared it advisable for Parent and Merger Sub, respectively, to enter into this Agreement.

     WHEREAS, Parent, Merger Sub and the Company desire to make certain representations, warranties, covenants and agreements specified herein in connection with this Agreement.

     NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained herein, and intending to be legally bound hereby, Parent, Merger Sub and the Company agree as follows:

ARTICLE IA

THE TENDER OFFER

          Section 1A.1. The Offer.

     (a) Provided that this Agreement shall not have been terminated in accordance with Section 7.1, Merger Sub shall, and Parent shall cause Merger Sub to (i) as promptly as practicable following the execution of this Agreement, and in any event within three Business Days following the date of this Agreement (or such other later date as the parties may mutually agree in writing) commence (within the meaning of Rule 14d-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) the Offer to purchase all outstanding Shares at the Per Share Amount. The Per Share Amount shall be net to the seller in cash, subject to reduction only for any applicable federal backup withholding or stock transfer taxes payable by the seller. The obligations of Merger Sub to, and of Parent to cause Merger Sub to, accept for payment and to pay for any Shares tendered pursuant to the Offer shall be subject to only those conditions set forth in Annex III (the “Tender Offer Conditions”). The Company agrees that no Shares held by the Company or any of its Subsidiaries (other than any Shares held on behalf of third parties) will be tendered pursuant to the Offer. For the avoidance of doubt, the parties hereto agree that Restricted Shares may be tendered in the Offer and be acquired by Parent or Merger Sub pursuant to the Offer.

     (b) Parent on behalf of Merger Sub expressly reserves the right from time to time, subject to Sections 1A.1(c) and (d), to waive any Tender Offer Condition or increase the Per Share Amount, provided that without the prior written consent of the Company, Merger Sub shall not, and Parent shall cause Merger Sub not to (i) decrease the Per Share Amount or change the form of consideration payable in the Offer, (ii) decrease the number of Shares sought to be purchased in the Offer, (iii) amend or waive satisfaction of the Minimum Condition (as defined in Annex III), (iv) impose additional conditions to the Offer, (v) make any change in the Offer that would require an extension or delay of the then-current Expiration Date (other than an increase in the Per Share Amount), (vi) modify or amend the Tender Offer Conditions (other

-2-

than to waive such Tender Offer Conditions, other than the Minimum Condition) or (vii) modify or amend any other term of the Offer, in the case of this clause (vii), in any manner (A) adverse to the holders of Shares or (B) which would reasonably be expected to result in, individually or in the aggregate, a Parent Material Adverse Effect.

     (c) On the date of commencement of the Offer, Parent and Merger Sub shall file or cause to be filed with the SEC a Tender Offer Statement on Schedule TO (together with all amendments and supplements thereto, the “Schedule TO”) with respect to the Offer which shall contain the offer to purchase (the “Offer to Purchase”) and related letter of transmittal and summary advertisement and other ancillary Offer documents and instruments pursuant to which the Offer will be made (collectively with any supplements or amendments thereto, the “Offer Documents”). Parent, Merger Sub and the Company each agrees promptly to correct any information provided by it for use in the Offer Documents if and to the extent that it shall have become false or misleading in any material respect and Merger Sub shall, and Parent further agrees to cause Merger Sub to, take all steps necessary to cause the Schedule TO, as so corrected or supplemented, to be filed with the SEC and the Offer Documents, as so corrected or supplemented, to be disseminated to holders of Shares, in each case as and to the extent required by applicable Federal securities laws. The Company and its counsel shall be given a reasonable opportunity to review and comment on any Offer Documents (including each amendment or supplement thereto) before they are filed with the SEC. Merger Sub shall, and Parent agrees to cause Merger Sub to, provide the Company with (in writing, if written), and to consult with the Company regarding, any comments (written or oral) that may be received by Parent, Merger Sub or their counsel from the SEC or its staff with respect to the Offer Documents as promptly as practicable after receipt thereof. The Company and its counsel shall be given a reasonable opportunity to review any such written and oral comments and proposed responses.

     (d) The Offer to Purchase shall provide for an expiration date of the 20^th Business Day (as defined in Rule 14d-1 under the Exchange Act, “Business Day”) following (and including the day of) the commencement of the Offer (such date, or such subsequent date to which the expiration of the Offer is extended pursuant to and in accordance with the terms of this agreement, the “Expiration Date”). Merger Sub shall not and Parent agrees that it shall cause Merger Sub to not terminate or withdraw the Offer other than in connection with the effective termination of this Agreement in accordance with Section 7.1 hereof. Notwithstanding the foregoing, Merger Sub may, without Parent receiving the consent of the Company, (A) extend the Expiration Date for any period required by applicable rules and regulations of the SEC or the New York Stock Exchange applicable to the Offer or (B) elect to provide a subsequent offering period for the Offer in accordance with Rule 14d-11 under the Exchange Act. So long as the Offer and this Agreement have not been terminated pursuant to Section 7.1, if at any scheduled Expiration Date, the Tender Offer Conditions shall not have been satisfied or earlier waived, Merger Sub shall, and Parent shall cause Merger Sub to extend the Offer and the Expiration Date to a date that is not more than five Business Days after such previously scheduled Expiration Date; provided that Merger Sub shall not and Parent shall not be required to cause Merger Sub to extend the Offer beyond the End Date. In the event the Acceptance Date occurs but Parent does not acquire a sufficient number of Shares to enable a Short Form Merger to occur, Merger Sub shall, and Parent shall cause Merger Sub to provide a “subsequent offering period” for a number

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of days to be determined by Parent but not less than three nor more than 15 Business Days, in accordance with Rule 14d-11 under the Exchange Act; provided that Merger Sub shall, and Parent shall cause Merger Sub to immediately accept and promptly pay for all Shares tendered during the initial offering period and immediately accept and promptly pay for all Shares tendered during such subsequent offering period, in each case in accordance with Rule 14d-11 under the Exchange Act.

     (e) Subject solely to the satisfaction or waiver by Merger Sub in accordance with Section 1A.1(b) of the Tender Offer Conditions, Merger Sub shall, and Parent shall cause Merger Sub, as soon as possible after the expiration of the Offer, to accept for payment and pay for Shares validly tendered and not withdrawn pursuant to the Offer (the date of acceptance for payment, the “Acceptance Date”). Parent shall provide or cause to be provided to Merger Sub on a timely basis the funds necessary to purchase any Shares that Merger Sub becomes obligated to purchase pursuant to the Offer.

          Section 1A.2. Company Action.

     (a) The Board of Directors, acting upon the unanimous recommendation of the Special Committee, at a duly called and held meeting, has unanimously (with Thomas D. Karol and Richard A. Nowak abstaining) adopted resolutions: (i) determining that the terms of the Offer, the Merger and the other transactions contemplated by this Agreement are fair and in the best interests of the Company and its stockholders, and declaring it advisable, to enter into this Agreement; (ii) approving the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Offer and the Merger; (iii) approving the Recommendation; (iv) rendering the Rights and the limitations on business combinations contained in Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”) and in Article Thirteenth of the Company’s Restated Certificate of Incorporation inapplicable to the Offer, this Agreement and the transactions contemplated hereby; and (v) electing that the Offer and the Merger, to the extent of the Board of Directors’ power and authority and to the extent permitted by law, not to be subject to any “moratorium,” “control share acquisition,” “business combination,” “fair price” or other form of anti-takeover laws and regulations (collectively, “Takeover Laws”) of any jurisdiction that may purport to be applicable to this Agreement.

     (b) On the date the Offer Documents are filed with the SEC if practicable and otherwise reasonably promptly thereafter, the Company shall file with the SEC a Solicitation/Recommendation Statement on Schedule 14D-9 (together with any amendments or supplements thereto, the “Schedule 14D-9”) that will comply in all material respects with the provisions of all applicable Federal securities laws. The Company agrees to use its commercially reasonable efforts to mail such Schedule 14D-9 to the stockholders of the Company along with the Offer Documents reasonably promptly after the commencement of the Offer. Subject to any Change of Recommendation in accordance with this Agreement, the Schedule 14D-9 and the Offer Documents shall contain the Recommendation. The Company agrees reasonably promptly to correct the Schedule 14D-9 if and to the extent that it shall

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become false or misleading in any material respect (and each of Parent and Merger Sub, with respect to written information supplied by it specifically for use in the Schedule 14D-9, shall promptly notify the Company of any required corrections of such information and cooperate with the Company with respect to correcting such information) and to supplement the information contained in the Schedule 14D-9 to include any information that shall become necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, and the Company shall use reasonable best efforts to cause the Schedule 14D-9 as so corrected to be filed with the SEC and disseminated to the Company’s stockholders to the extent required by applicable Federal securities laws. Parent and its counsel shall be given a reasonable opportunity to review and comment on the Schedule 14D-9 before it is filed with the SEC. The Company shall provide Parent and Merger Sub (in writing, if written), and consult with Parent and Merger Sub regarding, any comments the Company or its counsel may receive from the SEC or its staff with respect to the Schedule 14D-9 as promptly as practicable after receipt of such comments.

     (c) In connection with the Offer, the Company shall reasonably promptly following execution of this Agreement furnish Parent with mailing labels containing the names and addresses of all record holders of Shares, non-objecting beneficial owners list and security position listings of Shares held in stock depositories, each as of a recent date, and shall reasonably promptly furnish Parent with such additional information, including updated lists of stockholders, mailing labels, security position listings and computer files, and such other information and assistance as Merger Sub or its agents may reasonably request for the purpose of communicating the Offer to the record and beneficial holders of Shares.

     Section 1A.3. Directors. Promptly upon the payment by Parent or Merger Sub for all Shares tendered pursuant to the Offer which represent at least a majority of the Shares outstanding, and from time to time thereafter as Shares are acquired by Parent or Merger Sub, Parent shall be entitled to designate such number of directors, rounded up to the next whole number, on the Board of Directors as will give Parent, subject to compliance with Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder, representation on the Board of Directors equal to at least that number of directors which equals the product of the total number of directors on the Board of Directors (giving effect to the directors appointed or elected pursuant to this sentence and including current directors serving as officers of the Company) multiplied by the percentage that the aggregate number of Shares beneficially owned by Parent or any affiliate of Parent (including for purposes of this Section 1A.3 such Shares as are accepted for payment pursuant to the Offer, but excluding Shares held by the Company or any of its Subsidiaries) bears to the number of Shares outstanding; provided, however, that, in the event that Parent’s designees are appointed or elected to the Board of Directors, until the Effective Time (as defined in Section 1.3 hereof) the Board of Directors shall have at least three directors who are directors on the date hereof and who are neither officers of the Company nor designees, stockholders, affiliates or associates (within the meaning of the Federal securities laws) of Parent (one or more of such directors, the “Independent Directors”); provided further, that if there are in office fewer than three Independent Directors, the Board of Directors will take all action necessary to cause a person or, if there are two vacancies, two persons designated by the remaining Independent Director(s) to fill such vacancy(ies) who shall be neither an officer of the

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Company nor a designee, stockholder, affiliate or associate of Parent, and such person shall be deemed to be an Independent Director for purposes of this Agreement, or, if no Independent Directors remain, the other directors shall designate three persons to fill the vacancies who shall be neither an officer of the Company nor a designee, stockholder, affiliate or associate of Parent, and each such person shall be deemed to be an Independent Director for purposes of this Agreement. At each such time, the Company will, subject to any limitations imposed by applicable law or New York Stock Exchange rules, also cause (a) each committee of the Board of Directors, (b) if requested by Parent, the board of directors of each of the Subsidiaries and (c) if requested by Parent, each committee of such board of directors of each of the Subsidiaries to include persons designated by Parent constituting the same percentage of each such committee or board as Parent’s designees constitute on the Board of Directors. The Company shall, upon request by Parent, subject to the Company’s Certificate of Incorporation, promptly increase the size of the Board of Directors or exercise its best efforts to secure the resignations of such number of directors as is necessary to enable Parent’s designees to be elected to the Board of Directors in accordance with the terms of this Section 1A.3 and shall cause Parent’s designees to be so elected. Subject to applicable law, the Company shall promptly take all action necessary pursuant to Section 14(f) of the Exchange Act and Rule 14f-1 promulgated thereunder in order to fulfill its obligations under this Section 1A.3 and shall include in the Schedule 14D-9 mailed to stockholders promptly after the commencement of the Offer (or an amendment thereof or an information statement pursuant to Rule 14f-1 if Parent has not complied with its obligation to supply the Company the information required by Section 14(f) and Rule 14-f-1 at least two Business Days in advance of the date the Schedule 14D-9 is to be filed with the SEC) such information with respect to the Company and its officers and directors as is required under Section 14(f) and Rule 14f-1 in order to fulfill its obligations under this Section 1A.3. Parent will supply the Company any information with respect to itself and its nominees, officers, directors and affiliates required by Section 14(f) and Rule 14f-1. Notwithstanding anything in this Agreement to the contrary, following the time directors designated by Parent are elected or appointed to the Board of Directors and prior to the Effective Time, the affirmative vote of a majority of the Independent Directors shall be required to (v) authorize any agreement between the Company and any of its subsidiaries, on the one hand, and Parent, Merger Sub and any of their affiliates (other than the Company and any of its subsidiaries) on the other hand, (w) amend or terminate this Agreement on behalf of the Company, (x) exercise or waive any of the Company’s rights or remedies hereunder, (y) extend the time for performance of Parent’s or Merger Sub’s obligations hereunder or (z) take any other action by the Company in connection with this Agreement or the transactions contemplated hereby required to be taken by the Board of Directors. The Independent Directors shall have the authority to retain such counsel (which may include current counsel to the Company) and other advisors at the expense of the Company as determined appropriate by the Independent Directors and shall have the authority to institute any action on behalf of the Company to enforce the performance of this Agreement.

          Section 1A.4. Top-Up Option.

     (a) The Company hereby grants to Parent and Merger Sub an irrevocable option (the “Top-Up Option”) to purchase, at a price per share equal to the Per Share Amount, a number of Shares (the “Top-Up Option Shares”) that, when added to the number of Shares owned by Parent

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or Merger Sub or any wholly-owned Subsidiary of Parent or Merger Sub at the time of exercise of the Top-Up Option, constitutes one Share more than 90% of the number of Shares that will be outstanding immediately after the issuance of the Top-Up Option Shares. The Top-Up Option shall be exercised by Parent or Merger Sub, in whole or in part, at any time on or after the expiration date of the Offer and on or prior to the fifth Business Day after the later of (1) the expiration date of the Offer or (ii) the expiration of any subsequent offering period; provided, however, that the obligation of the Company to deliver Top-Up Option Shares upon the exercise of the Top-Up Option is subject to the conditions that (A) the number of Top-Up Option Shares to be issued by the Company shall in no event exceed 19.90% of the number of outstanding Shares or the voting power of the Company, in each case, as of immediately prior to and after giving effect to the issuance of the Top-Up Option Shares, (B) no provision of any applicable law and no judgment, injunction, order or decree shall prohibit the exercise of the Top-Up Option or the delivery of the Top-Up Option Shares in respect of such exercise, (C) the issuance of Top-Up Option Shares pursuant to the Top-Up Option would not require approval of the Company’s stockholders under applicable law or regulation (including, without limitation, New York Stock Exchange rules and regulations, (D) upon exercise of the Top-Up Option, the number of Shares owned by Parent or Merger Sub or any wholly-owned Subsidiary of Parent or Merger Sub constitutes one Share more than 90% of the number of Shares that will be outstanding immediately after the issuance of the Top-Up Option Shares, and (E) Merger Sub has accepted for payment and paid for all Shares validly tendered in the Offer and not withdrawn. The parties shall cooperate to ensure that the issuance of the Top-Up Option Shares is accomplished consistent with all applicable legal requirements of all Governmental Entities, including compliance with an applicable exemption from registration of the Top-Up Option Shares under the Securities Act. The Top-Up Option shall be exercised (and may only be exercised) if following its exercise, the condition set forth in clause (D) above would be satisfied.

     (b) Upon the exercise of the Top-Up Option in accordance with Section 1A.4(a), Parent shall so notify the Company and shall set forth in such notice (i) the number of Shares that are expected to be owned by Parent, Merger Sub or any wholly-owned Subsidiary of Parent or Merger Sub immediately preceding the purchase of the Top-Up Option Shares and (ii) a place and time for the closing of the purchase of the Top-Up Option Shares. The Company shall, as soon as practicable following receipt of such notice, notify Parent and Merger Sub of the number of Shares then outstanding and the number of Top-Up Option Shares. At the closing of the purchase of the Top-Up Option Shares, Parent or Merger Sub, as the case may be, shall pay the Company the aggregate price required to be paid for the Top-Up Option Shares, and the Company shall cause to be issued to Parent or Merger Sub a certificate representing the Top-Up Option Shares. The aggregate purchase price payable for the Top-Up Shares may be paid by Merger Sub or Parent by executing and delivering to the Company a promissory note having a principal amount equal to the balance of the aggregate purchase price for the Top-Up Shares. Any such promissory note shall bear interest at the rate of interest per annum equal to the Interest Rate, shall mature on the first anniversary of the date of execution and delivery of such promissory note and may be prepaid without premium or penalty. In the event that this Agreement is terminated after the Top-Up Option is exercised and prior to the Effective Time, all amounts then owing pursuant to the promissory note (including all interest) shall thereupon become immediately due and payable.

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ARTICLE I

THE MERGER

     Section 1.1 The Merger. On the terms and subject to the conditions set forth in this Agreement, and in accordance with the DGCL, at the Effective Time, Merger Sub will merge with and into the Company, whereupon the separate corporate existence of Merger Sub will cease, and the Company will continue its corporate existence under Delaware law as the surviving corporation in the Merger (the “Surviving Corporation”) and a wholly owned subsidiary of Parent.

     Section 1.2 Closing. The closing of the Merger (the “Closing”) shall take place at the offices of Debevoise & Plimpton LLP, 919 Third Avenue, New York, New York 10022 at 10:00 a.m., local time, on a date (the “Closing Date”) which shall be the second Business Day after the satisfaction or waiver (to the extent permitted by applicable Law) of the conditions set forth in Article VI (other than those conditions that by their nature are to be satisfied by actions to be taken at the Closing, but subject to the satisfaction or waiver of such conditions), or at such other place, date and time as the Company and Parent may agree in writing; provided, however, that if, as of or immediately following the Acceptance Date, the expiration of any subsequent offering period pursuant to Section 1A.1(d), or the exercise of the Top-Up Option, a Short Form Merger is available pursuant to Section 1.8 and Section 253 of the DGCL, the Closing shall, subject to the satisfaction or waiver of the conditions set forth in Section 6.1, occur no later than the Business Day immediately following the Acceptance Date, the expiration of such subsequent offering period or the closing of the purchase of the Top-Up Option Shares, as applicable.

     Section 1.3 Effective Time. Subject to the provisions of this Agreement, at the Closing, the Company will cause a certificate of merger (the “Certificate of Merger”) to be executed, acknowledged and filed with the Secretary of State of the State of Delaware in accordance with Section 251 of the DGCL (or to the extent provided in Section 1.8 hereof, Section 253 of the DGCL). The Merger will become effective at such time as the Certificate of Merger has been duly filed with the Secretary of State of the State of Delaware or at such later date or time as may be agreed by the Company and Merger Sub in writing and specified in the Certificate of Merger in accordance with the DGCL (the effective time of the Merger being hereinafter referred to as the “Effective Time”).

     Section 1.4 Effects of the Merger. The Merger shall have the effects set forth in this Agreement and the applicable provisions of the DGCL.

     Section 1.5 Certificate of Incorporation and By-laws of the Surviving Corporation. Subject to Section 5.9, at the Effective Time, (a) the certificate of incorporation of the Surviving Corporation shall be amended to read in its entirety as the certificate of incorporation of Merger Sub read immediately prior to the Effective Time, except that the name of the Surviving Corporation shall be Elk Corporation or ElkCorp and the provision in the certificate of incorporation of Merger Sub naming its incorporator shall be omitted, and (b) the by-laws of the Surviving Corporation shall be amended so as to read in their entirety as the by-laws of Merger Sub as in effect immediately prior to the Effective Time, until thereafter amended in accordance

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with applicable Law, except that the references to Merger Sub’s name shall be replaced by references to Elk Corporation or ElkCorp.

     Section 1.6 Directors. Subject to applicable Law, the directors of Merger Sub as of the Effective Time shall be the initial directors of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

     Section 1.7 Officers. The officers of the Company as of the Effective Time shall be the initial officers of the Surviving Corporation and shall hold office until their respective successors are duly elected and qualified, or their earlier death, resignation or removal.

     Section 1.8 Merger Without Meeting of Stockholders. Notwithstanding anything in this Agreement to the contrary, but subject to Section 6.1, if, following the Offer and any subsequent offering period and the exercise, if any, of the Top-Up Option, Parent, or any direct or indirect Subsidiary of Parent shall own at least 90% of the outstanding Shares, pursuant to the Offer, exercise of the Top-Up Option or otherwise, the parties hereto shall, subject to Article VI hereof, take all necessary and appropriate action to cause the Merger to become effective as soon as practicable after the satisfaction of such threshold, without a meeting of stockholders of the Company, in accordance with Section 253 of the DGCL (such Merger, a “Short Form Merger”).

ARTICLE II

CONVERSION OF SHARES; EXCHANGE OF CERTIFICATES

     Section 2.1 Effect on Capital Stock. At the Effective Time, by virtue of the Merger and without any action on the part of the Company, Merger Sub or the holders of any securities of the Company or Merger Sub:

     (a) Conversion of Shares. Each Share outstanding immediately prior to the Effective Time, other than Shares to be cancelled pursuant to Section 2.1(b) and other than Dissenting Shares, shall be converted automatically into and shall thereafter represent the right to receive in cash an amount equal to the Per Share Amount (the “Merger Consideration”). All Shares that have been converted into the right to receive the Merger Consideration as provided in this Section 2.1 shall be automatically cancelled and shall cease to exist, and the holders of certificates which immediately prior to the Effective Time represented such Shares shall cease to have any rights with respect to such Shares other than the right to receive the Merger Consideration and the right to receive any then unpaid dividend or other distribution with respect to such Shares having a record date before the Effective Time.

     (b) Parent and Merger Sub-Owned Shares. Each Share that is owned, directly or indirectly, by Parent or Merger Sub immediately prior to the Effective Time or held by the Company immediately prior to the Effective Time (in each case, other than any such Shares held on behalf of third parties) (the “Cancelled Shares”) shall by virtue of the Merger and without any action on the part of the holder thereof, be cancelled and retired and shall cease to exist, and no consideration shall be delivered in exchange for such cancellation and retirement.

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     (c) Conversion of Merger Sub Common Stock. At the Effective Time and by virtue of the Merger and without any action on the part of the holder thereof, each share of common stock, par value $0.01 per share, of Merger Sub issued and outstanding immediately prior to the Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.01 per share, of the Surviving Corporation with the same rights, powers and privileges as the shares so converted and shall constitute the only outstanding shares of capital stock of the Surviving Corporation. From and after the Effective Time, all certificates representing the common stock of Merger Sub shall be deemed for all purposes to represent the number of shares of common stock of the Surviving Corporation into which they were converted in accordance with the immediately preceding sentence.

     (d) Dissenters’ Rights. Any provision of this Agreement to the contrary notwithstanding, if required by the DGCL (but only to the extent required thereby), Shares that are issued and outstanding immediately prior to the Effective Time (other than Cancelled Shares) and that are held by holders of such Shares who have not voted in favor of the adoption of this Agreement or consented thereto in writing and who are entitled to demand and who have properly exercised appraisal rights with respect thereto in accordance with, and who have complied with, Section 262 of the DGCL (the “Dissenting Shares”) will not be converted into the right to receive the Merger Consideration, but instead holders of such Dissenting Shares will be entitled to receive payment of the appraised value of such Dissenting Shares in accordance with the provisions of such Section 262 unless and until any such holder fails to perfect or effectively withdraws or loses its rights to appraisal and payment under the DGCL. If, after the Effective Time, any such holder fails to perfect or effectively withdraws or loses such right, such Dissenting Shares will thereupon be treated as if they had been converted into and have become exchangeable for, at the Effective Time, the right to receive the Merger Consideration, without any interest thereon, and the Surviving Corporation shall remain liable for payment of the Merger Consideration for such Shares. At the Effective Time, any holder of Dissenting Shares shall cease to have any rights with respect thereto, except the rights provided in Section 262 of the DGCL and as provided in the previous sentence. The Company will give Parent (i) prompt notice of any demands received by the Company for appraisals of Shares, attempted withdrawals of such demands and any other instruments served pursuant to the DGCL and received by the Company relating to stockholders’ rights of appraisal and (ii) the opportunity to participate in all negotiations and proceedings with respect to such notices and demands. The Company shall not, except with the prior written consent of Parent, voluntarily make any payment with respect to any demands for appraisal or settle, or offer to agree to settle, any such demands.

     (e) Adjustments. If at any time during the period between the date of this Agreement and the Effective Time, any change in the outstanding shares of capital stock of the Company, or securities convertible or exchangeable into or exercisable for shares of capital stock, shall occur as a result of any reclassification, recapitalization, stock split (including a reverse stock split) or subdivision or combination, exchange or readjustment of shares, or any stock dividend or stock distribution with a record date during such period (excluding, in each case, normal quarterly cash dividends), merger or other similar transaction, the Merger Consideration shall be equitably adjusted to reflect such change; provided that nothing herein shall be construed to permit the Company to take any action with respect to its securities that is prohibited by the terms of this Agreement.

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     Section 2.2 Exchange of Certificates.

     (a) Paying Agent. At or prior to the earlier of the Acceptance Date or the Effective Time, Parent shall deposit, or shall cause to be deposited, with a U.S. bank or trust company that shall be appointed by Parent, and approved in advance by the Company in writing (such approval not to be unreasonably withheld) to act as a paying agent hereunder (and pursuant to an agreement in form and substance reasonably acceptable to Parent and the Company) (the “Paying Agent”), in trust for the benefit of holders of the Shares, the Company Stock Options and the Performance Shares, cash in U.S. dollars sufficient to pay (i) the aggregate Merger Consideration in exchange for all of the Shares outstanding immediately prior to the Effective Time (other than the Cancelled Shares), payable upon due surrender of the certificates that immediately prior to the Effective Time represented Shares (“Certificates”) (or effective affidavits of loss in lieu thereof) or non-certificated Shares represented by book-entry (“Book-Entry Shares”) pursuant to the provisions of this Article II and (ii) the Option and Stock-Based Consideration payable pursuant to Section 2.3 (such cash referred to in subsections (a)(i) and (a)(ii) being hereinafter referred to as the “Exchange Fund”).

     (b) Payment Procedures.

          (i) As soon as reasonably practicable after the Effective Time and in any event not later than the third Business Day following the Closing Date, the Paying Agent shall mail (x) to each holder of record of Shares whose Shares were converted into the Merger Consideration pursuant to Section 2.1, (A) a letter of transmittal (which shall specify that delivery shall be effected, and risk of loss and title to Certificates shall pass, only upon delivery of Certificates (or effective affidavits of loss in lieu thereof) or Book- Entry Shares to the Paying Agent and shall be in such form and have such other provisions as Parent and the Company may mutually agree), and (B) instructions for use in effecting the surrender of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares in exchange for the Merger Consideration and (y) to each holder of a Company Stock Option or a Performance Share, a check in an amount due and payable to such holder pursuant to Section 2.3 hereof in respect of such Company Stock Option or Performance Share.

          (ii) Upon surrender of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares to the Paying Agent together with such letter of transmittal, duly completed and validly executed in accordance with the instructions thereto, and such other documents as may customarily be required by the Paying Agent, the holder of such Certificates or Book-Entry Shares shall be entitled to receive in exchange therefor a check in an amount equal to the product of (x) the number of Shares represented by such holder’s properly surrendered Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares and (y) the Merger Consideration. No interest will be paid or accrued on any amount payable upon due surrender of Certificates (or effective affidavits of loss in lieu thereof) or Book-Entry Shares. In the event of a transfer of ownership of Shares that is not registered in the transfer records of the Company, a check for any cash to be paid upon due surrender of the Certificate may be paid to such a transferee if the Certificate formerly representing such Shares is presented to the Paying Agent,

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accompanied by all documents required to evidence and effect such transfer and to evidence that any applicable stock transfer Taxes have been paid or are not applicable.

          (iii) Parent, Merger Sub, the Surviving Corporation and the Paying Agent shall be entitled to deduct and withhold from the consideration otherwise payable under this Agreement (whether pursuant to the Offer, the Merger or otherwise) to any holder of Shares (including, for the avoidance of doubt, Restricted Shares) or holder of Company Stock Options or Performance Shares, such amounts as are required to be withheld or deducted under the Internal Revenue Code of 1986, as amended (the “Code”), the rules and regulations promulgated thereunder, or any provision of U.S. state or local Tax Law with respect to the making of such payment. To the extent that amounts are so withheld or deducted and paid over to the applicable Governmental Entity, such withheld or deducted amounts shall be treated for all purposes of this Agreement as having been paid to the holder of the Shares or holder of the Company Stock Options or Performance Shares, in respect of which such deduction and withholding were made.

     (c) Closing of Transfer Books. At the Effective Time, the stock transfer books of the Company shall be closed, and there shall be no further registration of transfers on the stock transfer books of the Surviving Corporation of the Shares that were outstanding immediately prior to the Effective Time. If, after the Effective Time, Certificates are presented to the Surviving Corporation or Parent for transfer, they shall be cancelled and exchanged for a check in the proper amount pursuant to this Article II.

     (d) Termination of Exchange Fund. Any portion of the Exchange Fund (including the proceeds of any investments thereof) that remains undistributed to the former holders of Shares for one year after the Effective Time shall be delivered to Surviving Corporation upon demand, and any former holders of Shares who have not surrendered their Shares in accordance with this Section 2.2 shall thereafter look only to the Surviving Corporation for payment of their claim for the Merger Consideration, without any interest thereon, upon due surrender of their Shares.

     (e) No Liability. Anything herein to the contrary notwithstanding, none of the Company, Parent, Merger Sub, the Surviving Corporation, the Paying Agent or any other person shall be liable to any former holder of Shares for any amount properly delivered to a public official pursuant to any applicable abandoned property, escheat or similar Law.

     (f) Investment of Exchange Fund. The Paying Agent shall invest all cash included in the Exchange Fund as reasonably directed by Parent; provided, however, that any investment of such cash shall be limited to direct short-term obligations of, or short-term obligations fully guaranteed as to principal and interest by, the U.S. government. Any interest and other income resulting from such investments shall be paid to the Surviving Corporation pursuant to Section 2.2(d) .

     (g) Lost Certificates. In the case of any Certificate that has been lost, stolen or destroyed, upon the making of an affidavit of that fact by the person claiming such Certificate to be lost, stolen or destroyed and, if required by the Paying Agent, the posting by such person of a bond in customary amount as indemnity against any claim that may be made against it with

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respect to such Certificate, the Paying Agent will issue in exchange for such lost, stolen or destroyed Certificate a check in the amount of the number of Shares represented by such lost, stolen or destroyed Certificate multiplied by the Merger Consideration.

     Section 2.3 Treatment of Stock Options and Other Stock-Based Awards.

     (a) Except as otherwise agreed in writing by Parent and the applicable holder thereof, each option to purchase Shares (collectively, the “Company Stock Options”) granted under the employee and director stock plans of the Company (the “Company Stock Plans”), whether vested or unvested, that is outstanding immediately prior to the Effective Time will at the Effective Time be cancelled and the holder of such Company Stock Option will, in full settlement of such Company Stock Option, receive from the Surviving Corporation an amount (subject to any applicable withholding tax) in cash equal to the product of (x) the excess, if any, of the Merger Consideration over the exercise price per Share of such Company Stock Option multiplied by (y) the total number of Shares subject to such Company Stock Option (the aggregate amount of such cash hereinafter referred to as the “Option Consideration”).

     (b) Except as otherwise agreed in writing by Parent and the applicable holder thereof, immediately prior to the Effective Time, each award of restricted common stock granted under the Company Stock Plans (the “Restricted Shares”) shall vest in full and be converted into the right to receive the Merger Consideration as provided in Section 2.1(a) .

     (c) Except as otherwise agreed in writing by Parent and the applicable holder thereof, at the Effective Time, each performance share based on Shares granted under the Company Stock Plans (the “Performance Shares”), whether vested or unvested, which is outstanding immediately prior to the Effective Time shall be deemed to be earned at the level set forth in the applicable Company Stock Plan and applicable award agreement, shall become fully vested and shall entitle the holder thereof to receive, at the Effective Time or, with respect to Shares issuable with respect to Performance Shares that the applicable holder has validly elected to defer on or prior to December 31, 2006, such later date as the applicable holder shall have validly elected, an amount in cash equal to the Merger Consideration in respect of each Share earned with respect to the Performance Shares (subject to any applicable withholding taxes) (the aggregate amount of such cash, together with the Option Consideration, hereinafter referred to as the “Option and Stock-Based Consideration”).

     (d) Prior to the Effective Time, the Company will adopt such resolutions as may reasonably be required in its discretion to effectuate the actions contemplated by this Section 2.3.

     Section 2.4 Further Actions. The Company has taken on or prior to December 31, 2006 any and all action reasonably necessary to permit the deferral of receipt of Shares in respect of Performance Shares pursuant to the deferral elections made by the applicable holders on or prior to December 31, 2006, and the Company shall take or cause to be taken on or prior to the Effective Time any and all additional action reasonably necessary, including by amending the Company Stock Plans, to permit the exchange of Company Stock Options, Restricted Shares or Performance Shares for Parent equity awards pursuant to the agreements between Parent and the applicable holder of a Company Stock Option, Restricted Share or Performance Share referred to

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in Section 2.3, in each case to the extent consistent with such plans, agreements and applicable Law.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

     Except (i) as disclosed in the Company SEC Documents filed on or after June 30, 2006 and prior to the date hereof (excluding any disclosures set forth in any risk factor section thereof or in any section relating to or containing forward looking statements) or (ii) as disclosed in the amended and restated disclosure schedule delivered by the Company to Parent immediately prior to the execution of this Agreement (the “Company Disclosure Letter”, it being agreed that disclosure of any item in any section of the Company Disclosure Letter shall also be deemed disclosure with respect to any other section of this Agreement to which the relevance of such item is reasonably apparent on its face), the Company represents and warrants to Parent and Merger Sub as follows:

     Section 3.1 Qualification, Organization, Subsidiaries, etc.

     (a) Each of the Company and its Subsidiaries is a legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization. Each of the Company and its Subsidiaries has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted and is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to have such power or authority, would not have, individually or in the aggregate, a Company Material Adverse Effect.

     (b) Each of the Company and its Subsidiaries is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so qualified or in good standing would not, individually or in the aggregate, have a Company Material Adverse Effect. The organizational or governing documents of the Company and each of its Subsidiaries, as previously provided to Parent, are in full force and effect.

     (c) As used in this Agreement, any reference to any fact, circumstance, event, change, effect or occurrence having a “Company Material Adverse Effect” means any fact, circumstance, event, change, effect or occurrence that has or would be reasonably likely to have a material adverse effect on the business, results of operation or financial condition of the Company and its Subsidiaries, taken as a whole, but, in any case, shall not include facts, circumstances, events, changes, effects or occurrences (i) generally affecting the industries in which the Company and its Subsidiaries operate (including general pricing changes), or the economy or the financial or securities markets in the United States or elsewhere in the world (including any regulatory and political conditions or developments, or any outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism), except to the extent any fact, circumstance, event, change,

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effect or occurrence that, relative to other industry participants, disproportionately impacts the assets, properties, business, results of operation or financial condition of the Company and its Subsidiaries, taken as a whole, (ii) resulting from the announcement of (A) the proposal of the Offer and Merger or (B) this Agreement and the transactions contemplated hereby or (iii) resulting from any litigation related to this Agreement or the transactions contemplated hereby brought by shareholders of the Company; and provided that any failure to meet internal or published projections, forecasts or revenue or earning predictions for any period shall not, in and of itself, constitute a Company Material Adverse Effect.

     Section 3.2 Capital Stock.

     (a) The authorized share capital of the Company consists of 100,000,000 Shares and 1,000,000 shares of preferred stock (the “Preferred Stock”). As of January 12, 2007, there were (i) 20,626,102 Shares issued and outstanding (including 128,501 unvested Restricted Shares granted under the 2004 Amended and Restated ElkCorp Equity Incentive Compensation Plan (the “2004 Plan”) and the 2002 ElkCorp Equity Incentive Compensation Plan (the “2002 Plan”) and no shares of Preferred Stock issued and outstanding, (ii) Company Stock Options granted under the 2004 Plan, the 2002 Plan, the Elcor Corporation 1998 Amended and Restated Incentive Stock Option Plan (the “1998 Plan”), and the Elcor Corporation 1993 Incentive Stock Option Plan (the “1993 Plan”), collectively, to purchase an aggregate of 1,338,365 Shares, with a weighted average exercise price of $24.06 per share, issued and outstanding, (iii) 581,700 shares subject to outstanding Performance Share awards (at the maximum 150% Target level) and (iv) 66,007 Shares available for future awards under the 2004 Plan. Other than Company Stock Options granted under the 2004 Plan, the 2002 Plan, the 1998 Plan, and the 1993 Plan, and unvested Restricted Shares granted under the 2002 Plan and the 2004 Plan, there are no Company Stock Options, and no unvested Restricted Shares issued and outstanding. All outstanding Shares are duly authorized, validly issued, fully paid and non-assessable, and are not subject to and were not issued in violation of any preemptive or similar right, purchase option, call or right of first refusal or similar right.

     (b) Except as set forth in subsection (a) above, as of the date hereof, (i) the Company does not have any shares of its capital stock issued or outstanding other than Shares that have become outstanding after January 12, 2007, which were reserved for issuance as of January 12, 2007 as set forth in subsection (a) above, and (ii) except as set forth in the Rights Agreement, there are no outstanding subscriptions, options, warrants, calls, convertible securities or other similar rights, agreements or commitments relating to the issuance of capital stock to which the Company or any of the Company’s Subsidiaries is a party obligating the Company or any of the Company’s Subsidiaries to (A) issue, transfer or sell any shares of capital stock or other equity interests of the Company or any Subsidiary of the Company or securities convertible into or exchangeable for such shares or equity interests, (B) grant, extend or enter into any such subscription, option, warrant, call, convertible securities or other similar right, agreement or arrangement, (C) redeem or otherwise acquire any such shares of capital stock or other equity interests, or (D) provide a material amount of funds to, or make any material investment (in the form of a loan, capital contribution or otherwise) in, any Subsidiary. Except for the issuance of Shares that were available for issuance as set forth in subsection (a) above, and except for regular quarterly cash dividends as publicly disclosed, from December 15, 2006 to the date hereof, the Company has not declared or paid any dividend or distribution in respect of the Shares, and has

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not issued, sold, repurchased, redeemed or otherwise acquired any Shares, and its Board of Directors has not authorized any of the foregoing.

     (c) Neither the Company nor any of its Subsidiaries has outstanding bonds, debentures, notes or, other than as referred to in Sections 3.2(a) and 3.2(b), other securities, the holders of which have the right to vote (or which are convertible into or exercisable for securities having the right to vote) with the stockholders of the Company on any matter.

     (d) There are no stockholder agreements, voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party with respect to the voting of the capital stock or other equity interest of the Company or any of its Subsidiaries.

     Section 3.3 Subsidiaries; Investments.

     (a) Section 3.3 of the Company Disclosure Letter sets forth a complete and correct list of each “significant subsidiary” of the Company as such term is defined in Regulation S-X promulgated by the SEC (each, a “Significant Subsidiary”). Section 3.3 of the Company Disclosure Letter also sets forth the jurisdiction of organization and percentage of outstanding equity interests (including partnership interests and limited liability company interests) owned by the Company or its Subsidiaries of each Significant Subsidiary. All equity interests (including partnership interests and limited liability company interests) of the Company’s Significant Subsidiaries held by the Company or any other Subsidiary have been duly and validly authorized and are validly issued, fully paid and non-assessable and were not issued in violation of any preemptive or similar rights, purchase option, call or right of first refusal or similar rights. All such equity interests owned by the Company or its Subsidiaries are free and clear of any Liens, other than restrictions imposed by applicable Law.

     (b) Except as set forth in Section 3.3 of the Company Disclosure Letter, neither the Company nor any of its Subsidiaries owns any shares of capital stock or other equity interests in (including any securities exercisable or exchangeable for or convertible into capital stock or other voting or equity interests in) any other Person.

     Section 3.4 Corporate Authority Relative to This Agreement; No Violation.

     (a) The Company has requisite corporate power and authority to enter into this Agreement and, subject to receipt of the Company Stockholder Approval, to consummate the transactions contemplated hereby. The Board of Directors, acting upon the unanimous recommendation of the Special Committee, at a duly called and held meeting, has unanimously (with Thomas D. Karol and Richard A. Nowak abstaining) adopted resolutions (i) determining that the terms of the Offer, the Merger and the other transactions contemplated by this Agreement are fair and in the best interests of the Company and its stockholders, and declaring it advisable, to enter into this Agreement, (ii) approving the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby, including the Offer and the Merger, and (iii) resolving to recommend that the stockholders of the Company tender their Shares in the Offer or otherwise approve the adoption of this Agreement (the “Recommendation”) and directing that to the extent required by the DGCL this Agreement and the Merger be submitted for consideration of the stockholders of the Company at the Company

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Meeting. Except for the Company Stockholder Approval and the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, no other corporate proceedings on the part of the Company are necessary to authorize the consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by the Company and, assuming this Agreement constitutes the valid and binding agreement of Parent and Merger Sub, constitutes the valid and binding agreement of the Company, enforceable against the Company in accordance with its terms.

     (b) The execution, delivery and performance by the Company of this Agreement and the consummation of the Merger by the Company do not and will not require any consent, approval, authorization or permit of, action by, filing with or notification to any United States or foreign governmental or regulatory agency, commission, court, body, entity or authority (each, a “Governmental Entity”), other than (i) the filing of the Certificate of Merger with the Secretary of State of the State of Delaware in accordance with the DGCL, (ii) compliance with the applicable requirements of the Exchange Act, including the filing of the Schedule 14D-9 in connection with the Offer and the Proxy Statement, if applicable, in connection with the Company Stockholder Approval, (iii) compliance with the rules and regulations of the New York Stock Exchange, and (iv) compliance with any applicable foreign or state securities or blue sky laws (collectively, clauses (i) through (iv), the “Specified Approvals”), and other than any consent, approval, authorization, permit, action, filing or notification the failure of which to make or obtain would not (A) individually or in the aggregate, have a Company Material Adverse Effect or (B) prevent or materially delay the consummation of the Offer or the Merger.

     (c) Assuming compliance with the matters referenced in Section 3.4(b), receipt of the Specified Approvals and the receipt of the Company Stockholder Approval, the execution, delivery and performance by the Company of this Agreement, the consummation by Parent of the Offer and the consummation by the Company of the Merger and the other transactions contemplated hereby do not and will not (i) contravene or conflict with the organizational or governing documents of the Company or any of its Subsidiaries, (ii) contravene or conflict with or constitute a violation of any provision of any Law binding upon or applicable to the Company or any of its Subsidiaries or any of their respective properties or assets, or (iii) result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any material obligation or to the loss of a material benefit under any loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, lease, agreement, contract, instrument, permit, concession, franchise, right or license binding upon the Company or any of its Subsidiaries or result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of the Company or any of its Subsidiaries, other than, in the case of clauses (ii) and (iii), any such violation, conflict, default, termination, cancellation, acceleration, right, loss or Lien that would not have, individually or in the aggregate, a Company Material Adverse Effect.

     Section 3.5 Reports and Financial Statements.

     (a) The Company has filed or furnished all forms, documents, statements and reports required to be filed or furnished prior to the date hereof by it with the SEC since June 30, 2004 (the forms, documents, statements and reports filed with the SEC since June 30, 2004 and those filed with the SEC subsequent to the date of this Agreement, if any, including any amendments

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thereto, the “Company SEC Documents”). As of their respective dates, or, if amended, as of the date of the last such amendment prior to the date hereof, the Company SEC Documents complied, and each of the Company SEC Documents filed subsequent to the date of this Agreement will comply, in all material respects with the applicable requirements of the Securities Act and the Exchange Act, as the case may be, and the applicable rules and regulations promulgated thereunder. None of the Company SEC Documents so filed or that will be filed subsequent to the date of this Agreement contained or will contain, as the case may be, any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

     (b) The consolidated financial statements (including all related notes and schedules) of the Company included in the Company SEC Documents (if amended, as of the date of the last such amendment) fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries, as at the respective dates thereof, and the consolidated results of their operations and their consolidated cash flows for the respective periods then ended (subject, in the case of the unaudited statements, to normal year-end audit adjustments and to any other adjustments described therein, including the notes thereto) in conformity with GAAP (except, in the case of the unaudited statements, as permitted by the SEC) applied on a consistent basis during the periods involved (except as may be indicated therein or in the notes thereto).

     Section 3.6 Internal Controls and Procedures. The Company has established and maintains disclosure controls and procedures and internal controls over financial reporting (as such terms are defined in paragraphs (e) and (f), respectively, of Rule 13a-15 under the Exchange Act) as required by Rule 13a-15 under the Exchange Act. The Company’s disclosure controls and procedures are reasonably designed to ensure that all material information required to be disclosed by the Company in the reports that it files or furnishes under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that all such material information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and to make the certifications required pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act. The Company’s management has completed an assessment of the effectiveness of the Company’s internal controls over financial reporting in compliance with the requirements of Section 404 of the Sarbanes-Oxley Act for the year ended June 30, 2006, and such assessment concluded that such controls were effective. The Company has disclosed, based on its most recent evaluations, to the Company’s outside auditors and the audit committee of the Company (A) all significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect in any material respect the Company’s ability to record, process, summarize and report financial data and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls over financial reporting.

     Section 3.7 No Undisclosed Liabilities. Except (a) as reflected or reserved against in the Company’s consolidated balance sheets (or the notes thereto) included in the Company SEC Documents filed after June 30, 2006 and prior to the date hereof, (b) as expressly permitted or

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contemplated by this Agreement, (c) for liabilities and obligations incurred in the ordinary course of business consistent with past practice since June 30, 2006 and (d) for liabilities or obligations which have been discharged or paid in full in the ordinary course of business, neither the Company nor any Subsidiary of the Company has any liabilities or obligations of any nature, whether or not accrued, contingent or otherwise, whether known or unknown and whether due or to become due, that would, individually or in the aggregate, have a Company Material Adverse Effect.

     Section 3.8 Compliance with Law; Permits.

     (a) The Company and each of the Company’s Subsidiaries are in compliance with and are not in default under or in violation of any applicable federal, state, local or foreign law, statute, ordinance, rule, regulation, judgment, order, injunction, decree or agency requirement of any Governmental Entity (collectively, “Laws” and each, a “Law”), except where such non-compliance, default or violation would not have, individually or in the aggregate, a Company Material Adverse Effect. Anything contained in this Section 3.8(a) to the contrary notwithstanding, no representation or warranty shall be deemed to be made in this Section 3.8(a) in respect of the matters referenced in Section 3.5 or 3.6, or in respect of environmental or labor Law matters, each of which matters is addressed by other sections of this Agreement.

     (b) The Company and the Company’s Subsidiaries are in possession of all franchises, grants, authorizations, licenses, permits, easements, variances, exceptions, consents, certificates, approvals and orders of any Governmental Entity necessary for the Company and the Company’s Subsidiaries to own, lease and operate their properties and assets or to carry on their businesses as they are now being conducted (the “Company Permits”), except where the failure to have any of the Company Permits would not have, individually or in the aggregate, a Company Material Adverse Effect. All Company Permits are in full force and effect, except where the failure to be in full force and effect would not have, individually or in the aggregate, a Company Material Adverse Effect. No suspension or cancellation of any of the Company Permits is pending or threatened, except where such suspension or cancellation would not, individually or in the aggregate, have a Company Material Adverse Effect. The Company and its Subsidiaries are not, and since December 31, 2004 have not been, in violation or breach of, or default under, any Company Permit, except where such violation, breach or default would not, individually or in the aggregate, have a Company Material Adverse Effect. As of the date of this Agreement, to the knowledge of the Company, no event or condition has occurred or exists which would result in a violation of, breach, default or loss of a benefit under, or acceleration of an obligation of the Company or any of its Subsidiaries under, any Company Permit (in each case, with or without notice or lapse of time or both), except for violations, breaches, defaults, losses or accelerations that would not, individually or in the aggregate, have a Company Material Adverse Effect.

     Section 3.9 Environmental Laws and Regulations. Except as would not, individually or in the aggregate, have a Company Material Adverse Effect, (i) the Company and its Subsidiaries have conducted their respective businesses in compliance with all applicable Environmental Laws (as hereinafter defined), (ii) there has been no release of any Hazardous Substance by the Company or any of its Subsidiaries in any manner that could reasonably be expected to give rise to any remedial obligation or corrective action requirement under applicable Environmental Laws, (iii) neither the Company nor any of its Subsidiaries has

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received any written notices, demand letters or written requests for information from any Governmental Entity alleging that the Company or any of its Subsidiaries is in violation of, or liable under, any Environmental Law, (iv) to the Company’s knowledge no Hazardous Substance has been disposed of, released or transported in violation of any applicable Environmental Law, or in a manner giving rise to any liability under Environmental Law, from any properties while owned or operated by the Company or any of its Subsidiaries as a result of any operations or activities of the Company or its Subsidiaries, (v) neither the Company, or its Subsidiaries nor any of their respective properties are subject to any liabilities relating to any suit, settlement, court order, administrative order, regulatory requirement, judgment or written claim asserted or arising under any Environmental Law or any agreement relating to environmental liabilities and (vi) to the knowledge of the Company, neither the Company nor any of its Subsidiaries has ever manufactured asbestos-containing materials.

     (a) As used herein, “Environmental Law” means any Law relating to (i) the protection, preservation or restoration of the environment (including air, water vapor, surface water, groundwater, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), or (ii) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of Hazardous Substances, in each case as in effect at the date hereof.

     (b) As used herein, “Hazardous Substance” means any substance listed, defined, designated or classified as hazardous, toxic, radioactive or dangerous under any Environmental Law. Hazardous Substance includes any substance to which exposure is regulated by any Governmental Entity or any Environmental Law including any toxic waste, pollutant, contaminant, hazardous substance, toxic substance, hazardous waste, special waste, industrial substance or petroleum or any derivative or byproduct thereof, radon, radioactive material, asbestos or asbestos containing material, urea formaldehyde, foam insulation or polychlorinated biphenyls.

     (c) The generality of any other representations and warranties in this Agreement notwithstanding, this Section 3.9 shall be deemed to contain the only representations and warranties in this Agreement with respect to Environmental Law, Hazardous Substances and any other environmental matter.

     Section 3.10 Employee Benefit Plans.

     (a) Section 3.10(a) of the Company Disclosure Letter lists all “multiemployer plans” within the meaning of 4001(a)(3) of ERISA (each a “Multiemployer Plan”) to which the Company or its Subsidiaries contributes, Company Benefit Plans that are employee welfare plans within the meaning of Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), any employee pension benefit plan within the meaning of Section 3(2) of ERISA and all other material Company Benefit Plans (whether or not such plan is subject to ERISA). “Company Benefit Plans” means all employee or director compensation and/or benefit plans, programs, policies, agreements or other arrangements, including any employee welfare plan within the meaning of Section 3(1) of ERISA, any employee pension benefit plan within the meaning of Section 3(2) of ERISA (whether or not such plan is subject to ERISA), and any bonus, incentive, deferred compensation, vacation, stock purchase, stock option, severance,

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employment, change of control or fringe benefit plan, program, agreement or arrangement (other than any Multiemployer Plan and any other plan, program or arrangement maintained by an entity other than the Company or any of its Subsidiaries pursuant to any collective bargaining agreements), in each case that are sponsored, maintained or contributed to by the Company or any of its Subsidiaries for the benefit of current or former employees, directors or consultants of the Company or its Subsidiaries. It is agreed and understood that no representation or warranty is made in respect of ERISA matters in any Section of this Agreement other than this Section 3.10 and Section 3.16.

     (b) The Company has heretofore made available to Parent true and complete copies of each of the material Company Benefit Plans (or with respect to unwritten plans, a written description thereof) and material related documents, including plan documents, trust agreements and other funding arrangements, but not limited to, (i) each writing constituting a part of such Company Benefit Plan, including all amendments thereto; (ii) the three most recent Annual Reports (Form 5500 Series) and accompanying schedules, if any; (iii) the most recent determination letter from the IRS (if applicable) for such Company Benefit Plan and (iv) all material communications received from or sent to the IRS, the Pension Benefit Guaranty Corporation or the Department of Labor and any schedules thereto.

     (c) (i) Each Company Benefit Plan has been maintained and administered in compliance with its terms and with applicable Law, including but not limited to ERISA and the Code to the extent applicable thereto, (ii) each of the Company Benefit Plans intended to be “qualified” within the meaning of Section 401(a) of the Code has received a favorable determination letter from the IRS or is entitled to rely upon a favorable opinion issued by the IRS, and, to the knowledge of the Company, there are no existing circumstances or any events that have occurred that could reasonably be expected to adversely affect the qualified status of any such plan; (iii) no Company Benefit Plan is subject to Title IV of ERISA; (iv) no Company Benefit Plan provides retiree medical or other welfare benefits, other than (A) coverage mandated by applicable Law or (B) benefits under any “employee pension plan”; (v) no liability under Title IV of ERISA has been incurred by the Company, its Subsidiaries or any ERISA Affiliate of the Company that has not been satisfied in full; (vi) all contributions or other amounts payable by the Company or its Subsidiaries as of the date hereof with respect to each Company Benefit Plan in respect of current or prior plan years have been paid or accrued in accordance with GAAP (other than with respect to amounts not yet due); (vii) neither the Company nor its Subsidiaries has engaged in a transaction in connection with which the Company or its Subsidiaries reasonably could be subject to either a civil penalty assessed pursuant to Section 409 or 502(i) of ERISA or a material tax imposed pursuant to Section 4975 or 4976 of the Code; and (viii) there are no pending, threatened or, to the knowledge of the Company, anticipated claims (other than claims for benefits in accordance with the terms of the Company Benefit Plans) by, on behalf of or against any of the Company Benefit Plans or any trusts related thereto which could reasonably be expected to result in any liability of the Company or any of its Subsidiaries except in the case of clauses (i), (vi) and (viii) as would not have, individually or in the aggregate, a Company Material Adverse Effect. “ERISA Affiliate” means, with respect to any entity, trade or business, any other entity, trade or business that is a member of a group described in Section 414(b), (c), (m) or (o) of the Code or Section 4001(b)(1) of ERISA that includes the first entity, trade or business, or that is a member of the same “controlled group” as the first entity, trade or business pursuant to Section 4001(a)(14) of ERISA.

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     (d) Neither the Company nor any of its Subsidiaries has, at any time during the last six years, contributed to or been obligated to contribute to any Multiemployer Plan other than as set forth on Section 3.10(d) of the Company Disclosure Letter.

     (e) The consummation of the transactions contemplated by this Agreement will not, either alone or in combination with another event, (i) entitle any current or former employee, consultant, officer or director of the Company or any of its Subsidiaries to severance pay, unemployment compensation or any other payment, except as expressly provided in Section 2.3 hereto, (ii) result in any payment becoming due, accelerate the time of payment or vesting, or increase the amount of compensation due to any such employee, consultant, officer or director, except as expressly provided in Section 2.3 hereof, (iii) result in any forgiveness of indebtedness, trigger any funding obligation under any Company Benefit Plan or impose any restrictions or limitations on the Company’s rights to administer, amend or terminate any Company Benefit Plan, or (iv) result in any payment that could reasonably be construed, individually or in combination with any other such payment, to constitute an “excess parachute payment” (as defined in Section 280G(b)(1) of the Code), in each case except as set forth in Section 3.10(e) of the Company Disclosure Letter. Except as set forth in the Executive Agreements listed in Section 3.10(e) of the Company Disclosure Letter, no person is entitled to receive any additional payment (including, without limitation, any tax gross up or other payment) from the Company or any of its Subsidiaries or any other person as a result of the imposition of the excise tax required by Section 4999(a) of the Code.

     (f) Each “nonqualified deferred compensation plan” (as defined in Section 409A(d)(1) of the Code) of the Company has been operated since January 1, 2005 in good faith compliance with Section 409A of the Code, the proposed regulations thereunder, IRS Notice 2005-1, Notice 2005-91, Notice 2006-33, Notice 2006-79 and Notice 2006-100. Each Stock Option has been granted with an exercise price no lower than “fair market value” (within the meaning of Section 409A and 422 of the Code) as of the grant date of such option.

     Section 3.11 Absence of Certain Changes or Events. Since June 30, 2006 through the date of this Agreement, (a) except as otherwise expressly contemplated or required by this Agreement, the businesses of the Company and its Subsidiaries have been conducted, in all material respects, in the ordinary course of business consistent with past practice and there have not been any facts, circumstances, events, changes, effects or occurrences that have had or would have, individually or in the aggregate, a Company Material Adverse Effect and (b) neither the Company nor any of its Subsidiaries has taken or agreed to take any action that would be prohibited by clauses (v), (vi), (vii), (xi), (xvi) or (xvii) of Section 5.1(b) .

     Section 3.12 Investigations; Litigation. As of the date hereof, there are no (a) investigations or proceedings pending (or, to the knowledge of the Company, threatened) by any Governmental Entity with respect to the Company or any of its Subsidiaries or (b) actions, suits or proceedings pending (or, to the knowledge of the Company, threatened) against or affecting the Company or any of its Subsidiaries, or any of their respective properties at law or in equity before, to the Company’s knowledge, and there are no orders, judgments or decrees of any Governmental Entity against the Company or any of its Subsidiaries, in each case of clause (a) or (b), which would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.

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     Section 3.13 Schedule 14D-9, Offer Documents; Proxy Statement; Other Information.

     (a) None of the information supplied or to be supplied in writing by or on behalf of the Company specifically for inclusion in the Offer Documents will, at the times such documents are filed with the SEC and are mailed to stockholders of the Company, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, or necessary to correct any statement supplied by the Company made in any communication with respect to the Offer previously filed with the SEC or disseminated to the stockholders of the Company. The Schedule 14D-9 will not, at the time the Schedule 14D-9 is filed with the SEC and at all times prior to the purchase of Shares by Merger Sub pursuant to the Offer, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they are made, not misleading, except that no representation or warranty is made by the Company with respect to information supplied in writing by Parent, Merger Sub or an Affiliate of Parent or Merger Sub which is contained in the Schedule 14D-9. The Schedule 14D-9 will comply as to form in all material respects with the provisions of the Exchange Act and the rules and regulations of the SEC thereunder.

     (b) The proxy statement (including the letter to stockholders, notice of meeting and form of proxy, the “Proxy Statement”) that may be filed by the Company with the SEC in connection with seeking the adoption of this Agreement by the stockholders of the Company will not, at the time it is filed with the SEC, or at the time it is first mailed to the stockholders of the Company or at the time of the Company Meeting, and at the time of any amendments or supplements thereto, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they are made, not misleading. The Company will cause the Proxy Statement to comply as to form in all material respects with the requirements of the Exchange Act applicable thereto as of the date of such filing. No representation is made by the Company with respect to statements made in the Proxy Statement based on information supplied, or required to be supplied, by Parent, Merger Sub or any of their affiliates specifically for inclusion or incorporation by reference therein.

     Section 3.14 Other Approvals.

     (a) Rights Plan. The Second Amendment to Rights Agreement, dated as of December 18, 2006, by and between the Company and the Rights Agent remains in full force and effect.

     (b) Section 203: Article Thirteenth. The Board of Directors has resolved to, and the Company after the execution of this Agreement will, take all action necessary to render the limitations on business combinations contained in Section 203 of the DGCL and in Article Thirteenth of the Company’s Restated Certificate of Incorporation inapplicable to this Agreement and the transactions contemplated hereby. Neither the execution and delivery of this Agreement nor the consummation of the Offer, the Merger and any of the transactions

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contemplated hereby will prohibit for any period of time, or impose any stockholder approval requirement with respect to, the Merger.

     Section 3.15 Tax Matters. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect:

     (a) the Company and each of its Subsidiaries have prepared and duly and timely filed (taking into account any extension of time within which to file) all Tax Returns required to be filed by any of them and all such filed Tax Returns are complete and accurate in all respects;

     (b) the Company and each of its Subsidiaries have duly and timely paid all Taxes that are required to be paid by any of them (whether or not shown as due on such Tax Return);

     (c) there are not pending, outstanding or threatened in writing, any audits, examinations, investigations or other proceedings in respect of Taxes of the Company or any of its Subsidiaries;

     (d) no deficiency with respect to Taxes has been proposed, asserted or assessed in each case, in writing, against the Company or any of its Subsidiaries;

     (e) there are no requests for rulings or determinations in respect of any material Taxes or material Tax Returns pending between the Company or any of its Subsidiaries on the one hand and any authority responsible for such Taxes or Tax Returns on the other;

     (f) the Company and each of its Subsidiaries has timely withheld and paid all Taxes required to be withheld and paid in connection with amounts paid or owing to any employee, creditor, independent contractor, shareholder or other third party and is in compliance with all applicable rules and regulations regarding the solicitation, collection and maintenance of any forms, certifications and other information required in connection therewith;

     (g) neither the Company nor any of its Subsidiaries has any liability as a result of being a party to any Tax sharing, Tax indemnity or other agreement or arrangement relating to Taxes (other than an agreement or arrangement solely among members of an affiliated, consolidated or unitary group the common parent of which is the Company or which includes only the Company and/or its Subsidiaries);

     (h) neither the Company nor any of its Subsidiaries has any liability for Taxes as a result of having been a member of any affiliated group within the meaning of Section 1504(a) of the Code, or any similar affiliated or consolidated group for Tax purposes under state, local or foreign law (other than a group the common parent of which is the Company or which includes only the Company and/or its Subsidiaries), or has any liability for the Taxes of any person (other than the Company and its Subsidiaries) under Treasury Regulations Section 1.1502 -6 or any similar provision of state, local or foreign law, or as a transferee or successor, or otherwise;

     (i) neither the Company nor any of its Subsidiaries has been a “controlled corporation” or a “distributing corporation” in any distribution that was purported or intended to be governed by Section 355 of the Code within the two-year period ending on the date hereof; and

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     (j) neither the Company nor any of its Subsidiaries has entered into any “listed transaction” within the meaning of Treasury Regulation Section 1.6011 -4(b)(2).

     As used in this Agreement, (i) “Taxes” means any and all domestic or foreign, federal, state, local or other taxes, charges, fees, imposts, levies or other assessments of any kind (together with any and all interest, penalties, additions to tax and additional amounts imposed with respect thereto) imposed by any Governmental Entity, including taxes on or with respect to income, franchises, windfall or other profits, gross receipts, property, sales, use, capital stock, payroll, employment, unemployment, social security, workers’ compensation or net worth, and taxes in the nature of excise, withholding, ad valorem or value added and (ii) “Tax Return” means any return, report or similar filing (including the attached schedules, supplements and additional or supporting material) filed or required to be filed with respect to Taxes, including any information return, claim for refund, amended return or declaration of estimated Taxes (and including any amendments with respect thereto). It is agreed and understood that no representation or warranty is made in respect of Tax matters in any Section of this Agreement other than this Section 3.15.

     Section 3.16 Labor Matters. Except for such matters which would not have, individually or in the aggregate, a Company Material Adverse Effect, (a) as of the date hereof, (i) there are no strikes or lockouts with respect to any employees of the Company or any of its Subsidiaries (“Employees”), (ii) to the knowledge of the Company, there is no union organizing effort pending or threatened against the Company or any of its Subsidiaries, (iii) there is no unfair labor practice, labor dispute (other than routine individual grievances) or labor arbitration proceeding pending or, to the knowledge of the Company, threatened against the Company or any of its Subsidiaries, and (iv) there is no slowdown, or work stoppage in effect or, to the knowledge of the Company, threatened with respect to Employees, (b) the Company and its Subsidiaries are in compliance with all applicable Laws respecting (i) employment and employment practices, (ii) terms and conditions of employment and wages and hours and (iii) unfair labor practices and (c) neither the Company nor any of its Subsidiaries has any liabilities under the Worker Adjustment and Retraining Act of 1998 (the “WARN Act”) as a result of any action taken by the Company (other than at the written direction of Parent or as a result of any of the transactions contemplated hereby). Except for such matters which would not have, individually or in the aggregate, a Company Material Adverse Effect, neither the Company nor any of its Subsidiaries has received written notice during the past two years of the intent of any Governmental Entity responsible for the enforcement of labor, employment, occupational health and safety or workplace safety and insurance/workers compensation laws to conduct an investigation of the Company or any of its Subsidiaries and, to the knowledge of the Company, no such investigation is in progress. It is agreed and understood that no representation or warranty is made in respect of labor matters in any Section of this Agreement other than Section 3.10 and this Section 3.16.

     Section 3.17 Intellectual Property. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, either the Company or a Subsidiary of the Company owns, or is licensed or otherwise possesses legally enforceable rights to use, all material trademarks, trade names, service marks, service names, mark registrations, logos, assumed names, registered and unregistered copyrights, patents or applications and registrations

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used in their respective businesses as currently conducted (collectively, the “Intellectual Property”). Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, (a) there are no pending or, to the knowledge of the Company, threatened claims by any person alleging infringement by the Company or any of its Subsidiaries for their use of the Intellectual Property of the Company or any of its Subsidiaries (b) to the knowledge of the Company, the conduct of the business of the Company and its Subsidiaries does not infringe any intellectual property rights of any person, (c) neither the Company nor any of its Subsidiaries has made any claim of a violation or infringement by others of its rights to or in connection with the Intellectual Property of the Company or any of its Subsidiaries and (iv) to the knowledge of the Company, no person is infringing any Intellectual Property of the Company or any of its Subsidiaries.

     Section 3.18 Property. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, the Company or a Subsidiary of the Company owns and has good and indefeasible title to all of its owned real property and good title to all its personal property and has valid leasehold interests in all of its leased properties free and clear of all Liens (except for Permitted Liens, and except for title exceptions, defects, liens, charges, restrictions, encumbrances, restrictive covenants and other matters, whether or not of record, which in the aggregate do not materially affect the continued use of the property for the purposes for which the property is currently being used (assuming the timely discharge of all obligations owing under or related to the owned real property, the personal property and the leased property) by the Company or a Subsidiary of the Company), sufficient to conduct their respective businesses as currently conducted. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, all leases under which the Company or any of its Subsidiaries leases any real or personal property are valid and effective against the Company or any of its Subsidiaries and there is not, under any of such leases, any existing default by the Company or any of its Subsidiaries, to the Company’s Knowledge, the counterparties thereto, or, to the Company’s knowledge, any event, fact or circumstance which, with notice or lapse of time or both, would become a default by the Company or any of its Subsidiaries or, to the Company’s knowledge, the counterparties thereto.

     Section 3.19 Opinion of Financial Advisors. The Special Committee has received the oral opinion, to be confirmed in writing, of Citigroup Global Markets Inc. (“Citigroup”), the Special Committee’s financial advisor, to the effect that, as of the date of such opinion and based upon and subject to the factors and assumptions set forth in such opinion, the consideration to be received in the Offer and the Merger, taken together, by holders of Shares (other than Parent, Merger Sub and their respective Affiliates) is fair, from a financial point of view, to such holders, and the Board of Directors has received the oral opinion, to be confirmed in writing, of UBS Securities LLC (“UBS”), the Board of Directors’ financial advisor, to the effect that, as of the date of such opinion, and based upon and subject to the factors and assumptions set forth in such opinion, the consideration to be received in the Offer and the Merger, taken together by holders of Shares (other than Parent, Merger Sub and their respective Affiliates) is fair, from a financial point of view, to such holders.

     Section 3.20 Required Vote of the Company Stockholders. The affirmative vote of the holders of a majority of the outstanding Shares is the only vote or consent of holders of securities

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of the Company which may be required to approve this Agreement and the transactions contemplated hereby, including the Merger (the “Company Stockholder Approval”).

     Section 3.21 Contracts.

     (a) Except as set forth in Section 3.21 of the Company Disclosure Letter or as filed with the SEC, as of the date hereof neither the Company nor any of its Subsidiaries is a party to or bound by, as of the date hereof, any Contract (whether written or oral) (i) which is a “material contract” (as such term is defined in Item 601(b)(10) of Regulation S-K of the SEC) to the Company; (ii) which constitutes a contract or commitment relating to indebtedness for borrowed money or the deferred purchase price of property (in either case, whether incurred, assumed, guaranteed or secured by any asset) in excess of $1,000,000; (iii) which is a customer or supply agreement providing for the receipt or expenditure of more than $300,000 on an annual basis; or (iv) which contains any provision that prior to or following the Effective Time would materially restrict or alter the conduct of business of, or purport to materially restrict or alter the conduct of business of, whether or not binding on, Parent or any Affiliate of the Parent (other than the Company, any of its Subsidiaries or any director, officer or employee of any of the Company or any of its Subsidiaries) (all contracts of the type described in this Section 3.21(a) (other than clause (iv)) being referred to herein as “Company Specified Contracts”).

     (b) Neither the Company nor any Subsidiary of the Company is in breach of or default under the terms of any Company Specified Contract where such breach or default would have, individually or in the aggregate, a Company Material Adverse Effect. To the knowledge of the Company, no party to any Company Specified Contract is in breach of or default under the terms of any Company Specified Contract where such breach or default would have, individually or in the aggregate, a Company Material Adverse Effect. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, each Company Specified Contract is a valid and binding obligation of the Company or the Subsidiary of the Company which is party thereto and, to the knowledge of the Company, of each other party thereto, and is in full force and effect, except that (i) such enforcement may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws, now or hereafter in effect, relating to creditors’ rights generally and (ii) equitable remedies of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

     Section 3.22 Finders or Brokers. Except for UBS and Citigroup, neither the Company nor any of its Subsidiaries has engaged any investment banker, broker or finder in connection with the transactions contemplated by this Agreement who might be entitled to any fee or any commission in connection with or upon consummation of the Merger or the other transactions contemplated thereby.

     Section 3.23 Interested Party Transactions. Except for employment Contracts filed or incorporated by reference as an exhibit to a Company SEC Document filed prior to the date hereof or Company Benefit Plans, Section 3.23 of the Company Disclosure Letter sets forth a correct and complete list of the contracts or arrangements that are in existence as of the date of this Agreement under which the Company has any existing or future liabilities between the Company or any of its Subsidiaries, on the one hand, and, on the other hand, any (A) present

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officer or director of either the Company or any of its Subsidiaries or any person that has served as such an officer or director within the past two years or any of such officer’s or director’s immediate family members, (B) record or beneficial owner of more than 5% of the Shares as of the date hereof, or (C) to the knowledge of the Company, any Affiliate of any such officer, director or owner (other than the Company or any of its Subsidiaries) (each, an “Affiliate Transaction”). The Company has provided to Parent correct and complete copies of each Contract or other relevant documentation (including any amendments or modifications thereto) providing for each Affiliate Transaction.

     Section 3.24 Insurance. The Company and its Subsidiaries maintain, or are entitled to the benefits of, insurance covering their properties, operations, personnel and businesses that are customary for businesses of their type. Except as would not have, individually or in the aggregate, a Company Material Adverse Effect, none of the Company or its Subsidiaries has received notice from any insurer or agent of such insurer that substantial capital improvements or other expenditures will have to be made in order to continue such insurance, and all such insurance is outstanding and duly in force.

     Section 3.25 Customers and Suppliers. As of the date hereof, neither the Company nor any of its Subsidiaries has received any notice or has any reason to believe that any significant customer or distributor of the Company or any of its Subsidiaries has materially reduced or will materially reduce, the use of products or services of the Company or any of its Subsidiaries, either as a result of this Agreement, the Merger or the transactions contemplated hereby and thereby or otherwise. To the Company’s knowledge, as of the date hereof there is no dispute with a material customer that would reasonably be expected to jeopardize the Company’s relationship with that material customer. From June 30, 2006 through the date hereof, there has not been any change in the terms and conditions of sale of raw materials, supplies or other products or services supplied to the Company by its significant suppliers, and neither the Company nor any of its Subsidiaries has knowledge that there will be such a change (other than general and customary price increases), including as a result of this Agreement, the Merger and the transactions contemplated hereby.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB

     Except as disclosed in the disclosure schedule delivered by Parent to the Company immediately prior to the execution of this Agreement (the “Parent Disclosure Letter”), Parent and Merger Sub jointly and severally represent and warrant to the Company as follows:

     Section 4.1 Qualification, Organization, Subsidiaries, etc. Each of Parent and Merger Sub is a legal entity duly organized, validly existing and in good standing under the Laws of its respective jurisdiction of organization and has all requisite corporate or similar power and authority to own, lease and operate its properties and assets and to carry on its business as presently conducted and is qualified to do business and is in good standing as a foreign corporation in each jurisdiction where the ownership, leasing or operation of its assets or properties or conduct of its business requires such qualification, except where the failure to be so

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organized, validly existing, qualified or in good standing, or to have such power or authority, would not, individually or in the aggregate, prevent or materially delay the consummation of the Offer or the Closing or prevent or materially delay or materially impair the ability of Parent or Merger Sub to satisfy the Tender Offer Conditions or the conditions precedent to the Merger, to obtain financing for the Offer or the Merger or to consummate the Merger, the Offer and the other transactions contemplated by this Agreement (a “Parent Material Adverse Effect”). Parent has made available to the Company prior to the date of this Agreement a true and complete copy of the certificates of incorporation and by-laws or other equivalent organizational documents of Parent and Merger Sub, each as amended through the date hereof.

     Section 4.2 Corporate Authority Relative to This Agreement; No Violation.

     (a) Each of Parent and Merger Sub has all requisite corporate power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the board of directors of each of Parent and Merger Sub and by Parent, as the sole stockholder of Merger Sub, and, except for the filing of the Certificate of Merger with the Secretary of State of the State of Delaware, no other corporate proceedings on the part of Parent or Merger Sub are necessary to authorize the consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by Parent and Merger Sub and, assuming this Agreement constitutes the valid and binding agreement of the Company, this Agreement constitutes the valid and binding agreement of Parent and Merger Sub, enforceable against each of Parent and Merger Sub in accordance with its terms.

     (b) The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation of the Offer and the Merger by Parent and Merger Sub do not and will not require any consent, approval, authorization or permit of, action by, filing with or notification to any Governmental Entity, other than (i) the filing of the Certificate of Merger, (ii) compliance with the applicable requirements of the Exchange Act, (iii) compliance with any applicable state securities or blue sky laws, and (iv) the other consents and/or notices set forth on Section 4.2(b) of the Parent Disclosure Letter (collectively, clauses (i) through (iv), the “Parent Approvals”), and other than any consent, approval, authorization, permit, action, filing or notification the failure of which to make or obtain would not, individually or in the aggregate, have a Parent Material Adverse Effect.

     (c) The execution, delivery and performance by Parent and Merger Sub of this Agreement and the consummation by Parent and Merger Sub of the Merger and the other transactions contemplated hereby do not and will not (i) contravene or conflict with the organizational or governing documents of Parent or any of its Subsidiaries, (ii) assuming compliance with the matters referenced in Section 4.2(b) and receipt of the Parent Approvals, contravene or conflict with or constitute a violation of any provision of any Law binding upon or applicable to Parent or any of its Subsidiaries or any of their respective properties or assets, or (iii) result in any violation of, or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancellation or acceleration of any material obligation or to the loss of a material benefit under any loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, lease, agreement, contract, instrument, permit, concession, franchise,

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right or license binding upon Parent or any of its Subsidiaries or result in the creation of any Lien (other than Permitted Liens) upon any of the properties or assets of Parent or any of its Subsidiaries, other than, in the case of clauses (ii) and (iii), any such violation, conflict, default, termination, cancellation, acceleration, right, loss or Lien that would not have, individually or in the aggregate, a Parent Material Adverse Effect.

     Section 4.3 Investigations; Litigation. There is no investigation or review pending (or, to the knowledge of Parent, threatened) by any Governmental Entity with respect to Parent or any of its Subsidiaries which would have, individually or in the aggregate, a Parent Material Adverse Effect, and there are no actions, suits, inquiries, investigations or proceedings pending (or, to Parent’s knowledge, threatened) against or affecting Parent or its Subsidiaries, or any of their respective properties at law or in equity before, and there are no orders, judgments or decrees of, or before, any Governmental Entity, in each case which would have, individually or in the aggregate, a Parent Material Adverse Effect.

     Section 4.4 Proxy Statement; Schedule 14D-9, Other Information. None of the information provided by Parent or its Subsidiaries to be included in the Schedule 14D-9 or the Proxy Statement will, at the time it is filed with the SEC, or at the time it is first mailed to the stockholders of the Company or at the time of the Company Meeting, contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading.

     Section 4.5 Financing. Attached as Annex I are true, accurate and complete copies, as of the date hereof, of (a) a fully executed equity commitment letter pursuant to which the Guarantor has committed to provide or cause to be provided the cash amounts set forth therein to provide equity financing to Parent and/or Merger Sub (the “Equity Commitment Letter”), and (b) a fully executed debt commitment letter and related term sheets from Bank of America, N.A., Merrill Lynch Capital Corporation, General Electric Capital Corporation, Banc of America Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated and GE Capital Markets, Inc. (the “Debt Commitment Letter” and together with the Equity Commitment Letter, the “Financing Commitments”), pursuant to which, and subject to the terms and conditions thereof, certain lenders have committed to provide Parent or Merger Sub with loans in the amounts described therein, the proceeds of which may be used to consummate the Offer, the Merger and the other transactions contemplated hereby (the “Debt Financing” and together with the equity financing pursuant to the Equity Commitment Letter, the “Financing”). Each of the Financing Commitments, in the form so delivered, is a legal, valid and binding obligation of Parent and Merger Sub and, to the knowledge of Parent, of the parties thereto. The Financing Commitments are in full force and effect and have not been withdrawn or terminated or otherwise amended or modified in any respect. Neither Parent nor Merger Sub is in breach of any of the terms or conditions set forth therein and to the knowledge of Parent no event has occurred which, with or without notice, lapse of time or both, could reasonably be expected to constitute a breach or failure to satisfy a condition precedent set forth therein. Parent or Merger Sub has paid any and all commitment or other fees required by the Financing Commitments that are due as of the date hereof, and will pay, after the date hereof, all such commitments and fees as they become due. The proceeds from the Financing constitute all of the financing required for the consummation of the transactions contemplated hereby (including the funding of the Tender Facility Interest

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Support, if necessary, described in the Debt Commitment Letter), and are sufficient for the satisfaction of all of Parent’s and Merger Sub’s obligations under this Agreement, including the payment of the Per Share Amount pursuant to the Offer, the Merger Consideration and the Option and Stock-Based Consideration (and any fees and expenses of or payable by Parent, Merger Sub or the Surviving Corporation). The Financing Commitments contain all of the conditions precedent to the obligations of the parties thereunder to make the Financing available to Parent on the terms therein, and neither Parent nor Merger Sub has knowledge of facts or circumstances that would cause any conditions precedent to the Equity Commitment Letter or the Debt Commitment Letter not to be satisfied on a timely basis. Notwithstanding anything in this Agreement to the contrary, the Debt Commitment Letters may be superseded at the option of Parent or Merger Sub after the date of this Agreement but prior to the Effective Time by the New Financing Commitments in accordance with Section 5.11. In such event, the term “Financing Commitment” as used herein shall be deemed to include the New Financing Commitments to the extent then in effect.

     Section 4.6 Guarantee. Concurrently with the execution of this Agreement, Carlyle Partners IV, L.P. (the “Guarantor”) has delivered to the Company an amended and restated guarantee addressed to the Company in the form attached as Annex II to this Agreement, guaranteeing certain obligations of Parent and Merger Sub, respectively, under this Agreement (the “Guarantee”). The Guarantee constitutes the legal, valid and binding obligation of the Guarantor, enforceable in accordance with its terms.

     Section 4.7 Capitalization of Merger Sub. The authorized capital stock of Merger Sub consists of 1,000 shares of common stock, par value $0.01 per share, all of which are validly issued and outstanding. All of the issued and outstanding capital stock of Merger Sub is, and at the Effective Time will be, owned by Parent or a direct or indirect subsidiary of Parent. Merger Sub has outstanding no option, warrant, right, or any other agreement pursuant to which any person other than Parent may acquire any equity security of Merger Sub. Merger Sub has not conducted any business prior to the date hereof and has, and prior to the Effective Time will have, no assets, liabilities or obligations of any nature other than those incident to its formation and pursuant to this Agreement and the Merger and the other transactions contemplated by this Agreement.

     Section 4.8 No Vote of Parent Stockholders. No vote of the stockholders of Parent or the holders of any other securities of Parent (equity or otherwise) is required by any applicable Law, the certificate of incorporation or by-laws or other equivalent organizational documents of Parent or the applicable rules of any exchange on which securities of Parent are traded, in order for Parent to consummate the transactions contemplated hereby.

     Section 4.9 Finders or Brokers. Except for Merrill Lynch & Co., Inc. and Banc of America Securities LLC, neither Parent nor any of its Subsidiaries has employed any investment banker, broker or finder in connection with the transactions contemplated by this Agreement who might be entitled to any fee or any commission in connection with or upon consummation of the Offer and/or the Merger.

     Section 4.10 No Additional Representations. Parent acknowledges that neither the Company nor any person has made any representation or warranty, express or implied, as to the

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accuracy or completeness of any information regarding the Company furnished or made available to Parent and its Representatives except as expressly set forth in Article III (which includes the Company Disclosure Letter and the Company SEC Documents), and neither the Company, its directors, officers, employees, agents or other representatives, nor any other person shall be subject to any liability to Parent or any other person resulting from the Company’s making available to Parent or Parent’s use of such information, including the presentation materials delivered to Parent, as subsequently updated, supplemented or amended (the “Information Memorandum”), or any information, documents or material made available to Parent in the due diligence materials provided to Parent, including in the data room, other management presentations (formal or informal) or in any other form in connection with the transactions contemplated by this Agreement. Without limiting the foregoing, the Company makes no representation or warranty to Parent with respect to (i) the information set forth in the Information Memorandum or (ii) any financial projection or forecast relating to the Company or any of its Subsidiaries, whether or not included in the Information Memorandum or any management presentation.

     Section 4.11 Certain Arrangements. As of the date of this Agreement, there are no contracts, undertakings, commitments, agreements, obligations or understandings, whether written or oral, between Parent or Merger Sub or any of their affiliates, on the one hand, and any member of the Company’s management or the Board of Directors, on the other hand, relating in any way to the Company, the transactions contemplated by this Agreement or to the operations of the Company after the Effective Time.

     Section 4.12 HSR Filing. Parent has filed the required Notification and Report Forms under the HSR Act and the applicable waiting period under the HSR Act expired on January 3, 2007.

ARTICLE V

COVENANTS AND AGREEMENTS

     Section 5.1 Conduct of Business by the Company and Parent.

     (a) From and after the date hereof and prior to the date on which a majority of the Company’s directors are designees of Parent or Merger Sub or the date, if any, on which this Agreement is earlier terminated pursuant to Section 7.1 (the “Termination Date”), and except (i) as may be required by applicable Law, (ii) as may be agreed in writing by Parent, with the prior written consent of Parent, (iii) as expressly contemplated, required or permitted by this Agreement or (iv) as set forth in Section 5.1 of the Company Disclosure Letter, the Company shall and shall cause each of its Subsidiaries to (x) conduct its business in the ordinary course consistent with past practice and (y) use commercially reasonable efforts to maintain and preserve intact its business organization and advantageous business relationships and to retain the services of its key officers and key employees; provided, however, that no action by the Company or its Subsidiaries with respect to matters specifically addressed by any provision of Section 5.1(b) shall be deemed a breach of this sentence unless such action would constitute a breach of such other provision.

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     (b) Between the date hereof and the date on which a majority of the Company’s directors are designees of Parent or Merger Sub, except as set forth in Section 5.1 of the Company Disclosure Letter or expressly contemplated or expressly permitted by this Agreement, without the prior written consent of Parent, the Company:

     (i) shall not make, declare or pay any dividend, or make any other distribution on, or directly or indirectly redeem, purchase or otherwise acquire or encumber, any shares of its capital stock or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of its capital stock, except in connection with cashless exercises or similar transactions pursuant to the exercise of stock options or other awards issued and outstanding as of the date hereof under the Company Stock Plans or permitted hereunder to be granted after the date hereof; provided that the Company may continue to pay regular quarterly cash dividends on the Shares consistent with past practice (not to exceed $0.05 per share per quarter) and this Section 5.1(b)(i) shall not apply to dividends or distributions paid in cash by Subsidiaries to the Company or to other Subsidiaries in the ordinary course of business consistent with past practice;

     (ii) shall not, and shall not permit any of its Subsidiaries to, adjust, split, combine or reclassify any of its capital stock or issue or authorize or propose the issuance of any other securities in respect of, in lieu of or in substitution for shares of its capital stock, except for any such transaction by a wholly owned Subsidiary of the Company which remains a wholly owned Subsidiary after consummation of such transaction;

     (iii) shall not, and shall not permit any of its Subsidiaries to, make any material change (or file any such change) in any method of Tax accounting or make any material change in any Tax election (except, in each case, as in the ordinary course of business or as is consistent with past practice); settle or compromise any material Tax liability for an amount materially in excess of the amount reserved therefor on the financial statements included in the Company SEC Documents, or enter into any closing agreement relating to Taxes for an amount materially in excess of the amount reserved therefor on the financial statements included in the Company SEC Documents;

     (iv) except as required by existing written agreements or Company Benefit Plans, or as otherwise required by applicable Law, shall not, and shall not permit any of its Subsidiaries to (A) increase the compensation or other benefits payable or provided to the Company’s directors or executive officers except for increases to executive officers in the ordinary course of business consistent with past practice that become effective no earlier than July 1, 2007 and only in the event the Effective Time does not occur prior to such date, (B) enter into any employment, change in control, severance or retention agreement with any employee of the Company or (C) establish, adopt, enter into or amend any collective bargaining agreement, or Company Benefit Plan, except to the extent required to comply with Section 409A of the Code or as may be immaterial;

     (v) shall not, and shall not permit any of its Subsidiaries to, enter into or make any loans to any of its officers, directors, employees, agents or consultants (other than

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loans or advances in the ordinary course of business consistent with past practice, including without limitation stock loans made under the Company’s Stock/Loan Plan to the extent approved for fiscal 2007 on June 26, 2006 by the Compensation Committee and the Board of Directors) or make any change in its existing borrowing or lending arrangements for or on behalf of any of such persons, except as required by the terms of any Company Benefit Plan;

     (vi) shall not, and shall not permit any of its Subsidiaries to, materially change financial accounting policies or procedures or any of its methods of reporting income, deductions or other material items for financial accounting purposes, except as required by GAAP, SEC rule or policy or applicable Law;

     (vii) shall not, and shall not permit any of its material Subsidiaries to, amend or waive any provision of its certificate of incorporation or by-laws or similar applicable charter documents or in the case of the Company, enter into any agreement with any of its stockholders in their capacity as such;

     (viii) except for transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, shall not, and shall not permit any of its Subsidiaries to, issue, sell, pledge, dispose of or encumber, or authorize the issuance, sale, pledge, disposition or encumbrance of, any shares of its capital stock or other ownership interest in the Company or any Subsidiaries or any securities convertible into or exchangeable for any such shares or ownership interest, or any rights, warrants or options to acquire or with respect to any such shares of capital stock, ownership interest or convertible or exchangeable securities or take any action to cause to be exercisable any otherwise unexercisable Company Stock Option under any existing Company Stock Option Plan (except as otherwise provided by the terms of this Agreement or the express terms of any unexercisable options outstanding on the date hereof), other than (A) issuances of Shares in respect of any exercise of Company Stock Options and settlement of any Performance Shares outstanding on the date hereof or as may be granted after the date hereof as permitted under this Section 5.1(b), (B) the grant of equity compensation awards in the ordinary course of business consistent with past practice under the Company’s 2004 Amended and Restated Equity Incentive Compensation Plan in accordance with the Long-Term Incentive Compensation Program and Regular Stock/Loan and Restricted Stock Grant Program approved for fiscal 2007 on June 26, 2006 by the Compensation Committee and the Board of Directors, and (C) the acquisition of Shares from a holder of a Company Stock Option, Restricted Shares or Performance Shares in satisfaction of withholding obligations or in payment of the exercise price;

     (ix) except for transactions in the ordinary course of business consistent with past practice, among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, shall not, and shall not permit any of its material Subsidiaries to, directly or indirectly, purchase, redeem or otherwise acquire any shares of its capital stock or any rights, warrants or options to acquire any such shares;

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     (x) shall not, and shall not permit any of its Subsidiaries to, incur, assume, guarantee, prepay or otherwise become liable for any indebtedness for borrowed money (directly, contingently or otherwise), other than in the ordinary course of business consistent with past practice and except for (A) any indebtedness for borrowed money among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries and (B) indebtedness for borrowed money incurred pursuant to agreements in effect prior to the execution of this Agreement not to exceed $10 million in aggregate principal amount outstanding at any time incurred by the Company or any of its Subsidiaries; provided that no such indebtedness shall contain covenants that materially restrict the Offer, the Merger or that are materially inconsistent with the Financing Commitments in effect as of the date hereof;

     (xi) except for transactions among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, shall not sell, lease, license, transfer, exchange or swap, mortgage or otherwise encumber (including securitizations), or subject to any Lien (other than Permitted Liens) or otherwise dispose of any material portion of its material properties or assets (excluding sales of finished goods inventories in the ordinary course of business), including the capital stock of Subsidiaries;

     (xii) shall not, and shall not permit any of its Subsidiaries to, modify, amend, terminate or waive any rights under any Company Specified Contract in any material respect in a manner which is adverse to the Company other than in the ordinary course of business or enter into any Company Specified Contract other than in the ordinary course of business and other than in response to an unexpected disruption in supply;

     (xiii) shall not make any capital expenditures having an aggregate value in excess of (i) with respect to the Company’s fiscal year ending June 30, 2007, together with the amount of capital expenditures made by the Company through the date hereof, $42 million and (ii) with respect to the Company’s fiscal quarter ending September 30, 2007, $10 million;

     (xiv) shall not make any investment in excess of $500,000 in the aggregate, whether by purchase of stock or securities, contributions to capital, property transfers, or entering into binding agreements with respect to any such investment or acquisition;

     (xv) shall not make any acquisition of another Person or business in excess of $500,000 in the aggregate, whether by purchase of stock or securities, contributions to capital, property transfers, or entering into binding agreements with respect to any such investment or acquisition;

     (xvi) shall not waive, release, assign, settle or compromise any claim, action or proceeding, other than waivers, releases, assignments, settlements or compromises that involve only the payment of monetary damages not in excess of $500,000 in the aggregate (excluding amounts to be paid under existing insurance policies) or otherwise pay, discharge or satisfy any claims, liabilities or obligations in excess of such amount, in each case, other than in the ordinary course consistent with past practice;

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     (xvii) shall not adopt a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization;

     (xviii) shall not take any material action with respect to any affiliate of the Company (other than any wholly owned Subsidiaries of the Company) that is outside the ordinary course of business consistent with past practice;

     (xix) shall not agree to take, make any commitment to take, or adopt any resolutions of its Board of Directors in support of, any of the actions prohibited by this Section 5.1(b); and

     (xx) shall not, and shall not permit any of its Subsidiaries to, agree, in writing or otherwise, to take any of the foregoing actions.

     (c) Parent agrees with the Company, on behalf of itself and its Subsidiaries and affiliates, that, between the date hereof and the Effective Time, Parent shall not, and shall not permit any of its Subsidiaries or affiliates to, take or agree to take any action (including entering into agreements with respect to any acquisitions, mergers, consolidations or business combinations) which would reasonably be expected to result in, individually or in the aggregate, a Parent Material Adverse Effect.

     Section 5.2 Access.

     (a) Subject to compliance with applicable Laws, the Company shall (i) provide to Parent and to its officers, employees, accountants, consultants, legal counsel, financial advisors and agents, lenders and other representatives (collectively, “Parent Representatives”) reasonable access during normal business hours, throughout the period prior to the earlier of the Effective Time and the Termination Date, to the Company’s and its Subsidiaries’ properties, contracts, commitments, books and records and (ii) furnish to Parent and its Parent Representatives such financial and operating data and other information as such Parent Representatives may reasonably request (including, but not limited to, furnishing to Parent the financial results of the Company in advance of any filing by the Company with the SEC containing such financial results) and (iii) instruct the employees, counsel, financial advisors, auditors and other authorized representatives (other than directors who are not employees) of the Company and its Subsidiaries to cooperate reasonably with Parent in its investigation of the Company and its Subsidiaries. The foregoing notwithstanding, the Company shall not be required to afford such access if it would unreasonably disrupt the operations of the Company or any of its Subsidiaries, would cause a violation of any agreement to which the Company or any of its Subsidiaries is a party, would cause a risk of a loss of privilege or trade secret protection to the Company or any of its Subsidiaries or would constitute a violation of any applicable Law, nor shall Parent or any of its Parent Representatives be permitted to perform any onsite procedure with respect to any property of the Company or any of its Subsidiaries.

     (b) Parent hereby agrees that all information provided to it or its Parent Representatives in connection with this Agreement and the consummation of the transactions contemplated hereby shall be deemed to be Evaluation Material, as such term is used in, and shall be treated in accordance with, the amended and restated confidentiality agreement, dated as

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of October 11, 2006, between the Company, Parent and Merger Sub (the “Confidentiality Agreement”); provided, that Parent shall be entitled to share such Evaluation Material with prospective co-investors or limited partners of the members of Parent and Merger Sub; provided further, however, that any prospective co-investors or limited partners of the shareholders of Parent to whom Parent provides Evaluation Material shall, prior to receiving such Evaluation Material, agree in writing to be bound by the confidentiality provisions of the Confidentiality Agreement or shall execute their own confidentiality agreements in identical or substantially identical form with the Company.

     Section 5.3 No Solicitation.

     (a) Subject to the provisions of this Section 5.3 set forth below, the Company agrees that neither it nor any of its Subsidiaries shall, and that it shall direct its and their respective officers, directors, employees, agents and representatives, including any investment banker, attorney or accountant retained by it or any of its Subsidiaries (“Representative”) not to, directly or indirectly, (i) solicit, initiate, knowingly encourage (including by providing information) or facilitate any inquiries, proposals or offers with respect to, or the making or completion of, any Alternative Proposal, (ii) engage or participate in any negotiations regarding, or provide or cause to be provided any non-public information or data relating to the Company or any of its Subsidiaries in connection with, or have any discussions with any Person relating to, an actual or proposed Alternative Proposal, or otherwise knowingly encourage or facilitate any effort or attempt to make or implement an Alternative Proposal, (iii) approve, endorse or recommend, or propose publicly to approve, endorse or recommend, any Alternative Proposal, (iv) approve, endorse or recommend, or publicly announce an intention to approve, endorse or recommend, or enter into, any letter of intent, agreement in principle, merger agreement, acquisition agreement, option agreement or other similar agreement relating to any Alternative Proposal, (v) amend, terminate, waive or fail to enforce, or grant any consent under, any confidentiality, standstill or similar agreement (provided, that the Company shall be permitted to waive any such agreement to permit the counterparty thereto to make a non-public offer or proposal to the Board of Directors (or Special Committee) of the Company with respect to an Alternative Proposal (except that references in the definition thereof to “20%” shall be deemed to be references to “50%” for purposes of this proviso)). Without limiting the foregoing, it is understood that any violation of the foregoing restrictions by any Subsidiary of the Company or Representatives of the Company or any of its Subsidiaries shall be deemed to be a breach of this Section 5.3 by the Company.

     (b) The Company shall, shall cause each of its Subsidiaries to, and shall direct each of its Representatives to, immediately cease any existing solicitations, discussions or negotiations with any Person (other than the parties hereto) that has made or indicated an intention to make an Alternative Proposal.

     (c) Notwithstanding anything to the contrary in Section 5.3(a) or (b), the Company may, in response to an unsolicited Alternative Proposal which did not result from or arise in connection with a breach of Section 5.3(a) and which the Board of Directors (acting through its Special Committee) determines, in good faith, after consultation with its outside counsel and financial advisors, may reasonably be expected to lead to a Superior Proposal, (i) furnish non-public information with respect to the Company and its Subsidiaries to the Person making such

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Alternative Proposal and its Representatives pursuant to a customary confidentiality agreement no less restrictive of and no more favorable to the other party than the terms and conditions of the Confidentiality Agreement (it being understood and agreed that the Existing Confidentiality Agreement is deemed to satisfy this requirement with respect to the parties thereto); and (ii) participate in discussions or negotiations with such Person and its Representatives regarding such Alternative Proposal; provided, however, (i) that Parent shall be entitled to promptly receive an executed copy of such confidentiality agreement and (ii) that the Company shall promptly provide or make available to Parent any material non-public information concerning the Company or any of its Subsidiaries that is provided to the Person making such Alternative Proposal or its Representatives which was not previously provided or made available to Parent.

     (d) Neither the Board of Directors nor any committee thereof shall withdraw or modify the Recommendation in a manner adverse to Parent or Merger Sub, or publicly propose to do so, or approve or recommend or publicly propose to approve or recommend, any Alternative Proposal. Notwithstanding the foregoing or any other provision of this Agreement, if, prior to receipt of the Company Stockholder Approval, the Board of Directors or the Special Committee determines in good faith, after consultation with outside counsel, that failure to so withdraw, qualify or modify its Recommendation would be inconsistent with the Board of Directors’ or the Special Committee’s exercise of its fiduciary duties, the Board of Directors or any committee thereof may withdraw, qualify or modify its Recommendation (a “Change of Recommendation”); provided, however, that if such Change of Recommendation is the result of a Superior Proposal, the Company shall have first provided prior written notice to Parent that it is prepared to effect a Change of Recommendation in response to a Superior Proposal, which notice shall describe in reasonable detail and include any draft agreements pertaining to such Superior Proposal, and such Change of Recommendation can only be made if Parent has not made, within three Business Days of receipt of such notice, a proposal that the Board of Directors or any committee thereof determines is at least as favorable to the stockholders of the Company as such Superior Proposal.

     (e) The Company promptly (and in any event within 48 hours) shall advise Parent orally and in writing of (i) any Alternative Proposal or indication or inquiry with respect to or that would reasonably be expected to lead to any Alternative Proposal, (ii) any request for non-public information relating to the Company or its Subsidiaries, other than requests for information not reasonably expected to be related to an Alternative Proposal, and (iii) any inquiry or request for discussion or negotiation regarding an Alternative Proposal, including in each case the identity of the person making any such Alternative Proposal or indication or inquiry and the material terms of any such Alternative Proposal or indication or inquiry (including copies of any document or correspondence evidencing such Alternative Proposal or inquiry). The Company shall keep Parent reasonably informed on a reasonably current basis of any material change to the terms of any such Alternative Proposal or indication or inquiry.

     (f) Nothing contained in this Agreement shall prohibit the Company or its Board of Directors (or the Special Committee) from disclosing to its stockholders a position contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange Act, or from issuing a “stop, look and listen” statement pending disclosure of its position thereunder.

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     (g) As used in this Agreement, “Alternative Proposal” shall mean (i) any inquiry, proposal or offer from any Person or group of Persons other than Parent or one of its Subsidiaries for a merger, reorganization, share exchange, consolidation, business combination, recapitalization, dissolution, liquidation, or similar transaction involving the Company (or any Subsidiary or Subsidiaries of the Company whose business constitutes 20% or more of the net revenues, net income or assets of the Company and its Subsidiaries, taken as a whole), (ii) any proposal for the issuance by the Company of over 20% of its equity securities or (iii) any proposal or offer to acquire in any manner, directly or indirectly, over 20% of the equity securities or consolidated total assets of the Company and its Subsidiaries, in each case other than the Offer or the Merger.

     (h) As used in this Agreement, “Superior Proposal” shall mean any Alternative Proposal (i) on terms which the Board of Directors (or the Special Committee) determines in good faith, after consultation with the Company’s outside legal counsel and financial advisors, to be more favorable to the holders of Shares than the Offer and the Merger, taking into account all the terms and conditions of such proposal and this Agreement and (ii) that the Board of Directors (or Special Committee) believes is reasonably capable of being completed, taking into account all financial, regulatory, legal and other aspects of such proposal; provided, however, that for purposes of the definition of “Superior Proposal”, the references to “20%” in the definitions of Alternative Proposal shall be deemed to be references to “50%”.

     Section 5.4 Filings; Other Actions.

     (a) If the Company Stockholder Approval is required under the DGCL, as promptly as reasonably practicable following the consummation or expiration of the Offer, the Company shall prepare and file with the SEC the Proxy Statement, which shall, subject to Section 5.3, include the Recommendation and shall use its reasonable best efforts to respond to any comments by the SEC staff in respect of the Proxy Statement. Parent and Merger Sub shall, and Parent shall cause Merger Sub to, provide to the Company such information as the Company may reasonably request for inclusion in the Proxy Statement. The Company shall use its reasonable best efforts to cause the Proxy Statement to be mailed to the Company’s stockholders as promptly as practicable after the Proxy Statement is cleared by the SEC. The Company shall as promptly as practicable notify Parent of the receipt of any oral or written comments from the SEC relating to the Proxy Statement. The Company shall cooperate and provide Parent with a reasonable opportunity to review and comment on the draft of the Proxy Statement (including each amendment or supplement thereto). The Company shall provide Parent with copies of all filings made and correspondence with the SEC with respect to the Proxy Statement. If at any time prior to the Effective Time, any information should be discovered by any party hereto which should be set forth in an amendment or supplement to the Proxy Statement so that the Proxy Statement would not include any misstatement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, the party which discovers such information shall promptly notify the other parties hereto and, to the extent required by applicable Law, an appropriate amendment or supplement describing such information shall be promptly filed by the Company with the SEC and disseminated by the Company to the stockholders of the Company.

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     (b) Subject to the other provisions of this Agreement, the Company shall (i) take all action necessary in accordance with the DGCL and its certificate of incorporation and by-laws to duly call, give notice of, convene and hold a meeting of its stockholders as promptly as reasonably practicable following the mailing of the Proxy Statement for the purpose of obtaining the Company Stockholder Approval (such meeting or any adjournment or postponement thereof, the “Company Meeting”), and (ii) subject to a Change of Recommendation in accordance with Section 5.3(d), use all reasonable best efforts to solicit from its stockholders proxies in favor of the approval of this Agreement, the Merger and the other transactions contemplated hereby. Notwithstanding anything in this Agreement to the contrary, unless this Agreement is terminated in accordance with Section 7.1 and subject to compliance with Section 7.3, the Company, regardless of whether the Board of Directors (whether or not acting through the Special Committee, if then in existence) has approved, endorsed or recommended an Alternative Proposal, or has withdrawn, modified or amended the Recommendation, will submit this Agreement to the stockholders of the Company at the Company Meeting for the purpose of adopting this Agreement. Notwithstanding the foregoing, if a Short Form Merger may be effected in accordance with Section 1.8 and Section 253 of the DGCL, the parties hereto agree to take all necessary and appropriate action to cause the Merger to become effective on the dates specified in Section 1.2 without a Company Meeting, in accordance with Section 253 of the DGCL.

     Section 5.5 Employee Matters.

     (a) From and after the Effective Time, the Company shall, and Parent shall cause the Company to, honor all Company Benefit Plans and compensation arrangements and agreements in accordance with their terms as in effect immediately before the Effective Time, provided that nothing in this Agreement shall prohibit the amendment or termination of any such Company Benefit Plans, arrangements and agreements in accordance with their terms and applicable Law. For a period of twelve (12) months following the Effective Time, Parent shall provide, or shall cause to be provided, to each current and former employee of the Company and its Subsidiaries other than such employees covered by collective bargaining agreements (“Company Employees”) compensation opportunities and benefits that are no less favorable, in the aggregate, to the compensation opportunities and benefits provided to Company Employees immediately before the Effective Time (excluding the value of equity based awards), it being understood that each element of compensation and benefits may be different from the individual elements of compensation and benefits provided to Company Employees prior to the Effective Time.

     (b) For all purposes (including purposes of vesting, eligibility to participate and level of benefits) under the employee benefit plans of Parent and its Subsidiaries providing benefits to any Company Employees after the Effective Time (the “New Plans”), each Company Employee shall be credited with his or her years of service with the Company and its Subsidiaries and their respective predecessors before the Effective Time, to the same extent as such Company Employee was entitled, before the Effective Time, to credit for such service under any similar Company employee benefit plan in which such Company Employee participated or was eligible to participate immediately prior to the Effective Time, provided that the foregoing shall not apply with respect to benefit accrual under any defined benefit pension plan or retiree medical benefit plan to the extent that its application would result in a duplication of benefits. In addition, and without limiting the generality of the foregoing, (i) each Company Employee shall be

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immediately eligible to participate, without any waiting time, in any and all New Plans, unless such employee would not have been eligible to participate under comparable plans of the Company or its Subsidiaries immediately prior to the Effective Time and (ii) for purposes of each New Plan providing medical, dental, pharmaceutical and/or vision benefits to any Company Employee, Parent shall cause all pre-existing condition exclusions and actively-at-work requirements of such New Plan to be waived for such employee and his or her covered dependents, unless such conditions would not have been waived under the comparable plans of the Company or its Subsidiaries in which such employee participated immediately prior to the Effective Time and Parent shall cause any eligible expenses incurred by such employee and his or her covered dependents during the portion of the plan year of the Company Benefit Plan in which such Company Employee participated immediately before the consummation of the Merger (such plans, collectively, the “Old Plans”) ending on the date such employee’s participation in the corresponding New Plan begins to be taken into account under such New Plan for purposes of satisfying all deductible, coinsurance and maximum out-of-pocket requirements applicable to such employee and his or her covered dependents for the applicable plan year as if such amounts had been paid in accordance with such New Plan.

     (c) Parent hereby acknowledges that a “change of control” (or similar phrase) within the meaning of the Company Stock Plans (and award agreements thereunder) and the Company Benefit Plans, as applicable, including without limitation the change in control agreements, in each case listed on Section 5.5(c) of the Company Disclosure Letter will occur at or prior to the Effective Time, as applicable.

     (d) Nothing herein shall be deemed to be a guarantee of employment for any Employee, or to restrict the right of the Surviving Corporation to terminate any Employee. Notwithstanding the foregoing provisions of this Section 5.5, nothing contained herein, whether express or implied, (i) shall be treated as an amendment or other modification of any Company Benefit Plan, or (ii) shall limit the right of the Surviving Corporation or any of its Subsidiaries to amend, terminate or otherwise modify any Company Benefit Plan following the Closing Date. Parent, Merger Sub and the Company acknowledge and agree that all provisions contained in this Section 5.5 with respect to Employees are included for the sole benefit of Parent, Merger Sub and the Company, and that nothing herein, whether express or implied, shall create any third party beneficiary or other rights (i) in any other person, including, without limitation, any Employees, former Employees, any participant in any Company Benefit Plan, or any dependent or beneficiary thereof, or (ii) to continued employment with Parent, the Surviving Corporation, or any of their respective affiliates or continued participation in any Company Benefit Plan.

     Section 5.6 Efforts.

     (a) Subject to the terms and conditions set forth in this Agreement, each of the parties hereto shall, and the Company shall cause each of its Subsidiaries to, use all reasonable best efforts to take promptly, or cause to be taken, all actions, and to do promptly, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable under applicable Laws to consummate the Offer and to consummate and make effective the Merger and the other transactions contemplated by this Agreement, including (i) the obtaining of all necessary actions or nonactions, waivers, consents, clearances, approvals, and expirations or terminations of waiting periods, including the Specified Approvals and the Parent

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Approvals, from Governmental Entities and the making of all necessary registrations and filings and the taking of all steps as may be necessary to obtain an approval, clearance or waiver from, or to avoid an action or proceeding by, any Governmental Entity, (ii) the obtaining of all necessary consents, approvals or waivers from third parties, (iii) the defending of any lawsuits or other legal proceedings, whether judicial or administrative, challenging this Agreement or the consummation of the Merger and the other transactions contemplated by this Agreement and (iv) the execution and delivery of any additional instruments reasonably necessary to consummate the transactions contemplated by this Agreement; provided, however, that in no event shall the Company or any of its Subsidiaries be required to pay prior to the Effective Time any fee, penalty or other consideration to any third party for any consent or approval required for the consummation of the transactions contemplated by this Agreement under any contract or agreement (other than de minimis amounts or if Parent and Merger Sub have provided adequate assurance of repayment). Neither party shall take any action that is intended or would reasonably be expected to, individually or in the aggregate, result in any of the Tender Offer Conditions or the conditions to the Merger set forth in Article VI not being satisfied or the satisfaction of those conditions being materially delayed.

     (b) Subject to the terms and conditions herein provided and without limiting the foregoing, the Company and Parent shall (i) use reasonable best efforts to cooperate with each other in (x) determining whether any filings are required to be made with, or consents, permits, authorizations, waivers, clearances, approvals, and expirations or terminations of waiting periods are required to be obtained from, any third parties or Governmental Entities in connection with the execution and delivery of this Agreement and the consummation of, the Merger and the transactions contemplated hereby and (y) timely making all such filings and timely seeking all such consents, permits, authorizations or approvals, (ii) supply to any Governmental Entity as promptly as practicable any additional information or documents that may be requested pursuant to any Law or by such Governmental Entity and (iii) take, or cause to be taken all other actions and do, or cause to be done, all other things necessary, proper or advisable to consummate and make effective the Merger and the other transactions contemplated hereby, including taking all such further action as may be necessary to resolve such objections, if any, as state antitrust enforcement authorities or competition authorities of any other nation or other jurisdiction or any other person may assert under any Law with respect to the Merger and the other transactions contemplated hereby, and to avoid or eliminate each and every impediment under any Law that may be asserted by any Governmental Entity with respect to the Merger so as to enable the Expiration Date and the Closing to occur as soon as reasonably possible (and in any event no later than the End Date), including, without limitation, (x) proposing, negotiating, committing to and effecting, by consent decree, hold separate order or otherwise, the sale, divestiture or disposition of any material assets or businesses of Parent or its Subsidiaries or controlled affiliates or of the Company or its Subsidiaries and (y) otherwise taking or committing to take any actions that after the Closing Date would limit the freedom of Parent or its Subsidiaries’ (including the Surviving Corporation’s) or controlled affiliates’ freedom of action with respect to, or its ability to retain, one or more of its or its Subsidiaries (including the Surviving Corporation’s) businesses, product lines or assets, in each case as may be required in order to avoid the entry of or to effect the dissolution of, any injunction, temporary restraining order or other order in any suit or proceeding which would otherwise have the effect of preventing the consummation of the Offer on the Expiration Date or the Closing, materially delaying the Expiration Date or the Closing or delaying the Expiration Date or the Closing beyond the End

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Date; provided that neither the Company nor any of its Subsidiaries shall become subject to, or consent or agree to or otherwise take any action with respect to, any requirement, condition, understanding, agreement or order of a Governmental Entity to sell, to hold separate or otherwise dispose of, or to conduct, restrict, operate, invest or otherwise change the assets or business of the Company or any of its affiliates, unless such requirement, condition, understanding, agreement or order is binding on the Company only in the event that the Closing occurs.

     (c) Subject to applicable legal limitations and the instructions of any Governmental Entity, the Company and Parent shall keep each other apprised of the status of matters relating to the completion of the transactions contemplated hereby, including to the extent permitted by Law promptly furnishing the other with copies of notices or other communications sent or received by the Company or Parent, as the case may be, or any of their respective Subsidiaries, to or from any third party and/or any Governmental Entity with respect to such transactions. The Company and Parent shall permit the other party to review in advance any proposed communication to any supervisory or Governmental Entity. Each of the Company and Parent agrees not to participate in any substantive meeting or discussion, either in person or by telephone, with any Governmental Entity in connection with the proposed transactions unless it consults with the other party in advance and, to the extent not prohibited by such Governmental Entity, gives the other party the opportunity to attend and participate.

     (d) In furtherance and not in limitation of the covenants of the parties contained in this Section 5.6, if any administrative or judicial action or proceeding, including any proceeding by a private party, is instituted (or threatened to be instituted) challenging any transaction contemplated by this Agreement, each of the Company and Parent shall cooperate in all respects with each other and shall use their respective reasonable best efforts to contest and resist any such action or proceeding and to have vacated, lifted, reversed or overturned any decree, judgment, injunction or other order, whether temporary, preliminary or permanent, that is in effect and that prohibits, prevents or restricts consummation of the Merger and the other transactions contemplated by this Agreement. Notwithstanding the foregoing or any other provision of this Agreement, nothing in this Section 5.6 shall limit a party’s right to terminate this Agreement pursuant to Section 7.1(b) or 7.1(c) so long as such party has, prior to such termination, complied with its obligations under this Section 5.6.

     (e) It is agreed that this Section 5.6 shall not govern the obligations of the parties with respect to obtaining the Financing, which obligations are set forth in Section 5.11.

     Section 5.7 Takeover Statute. If any “fair price,” “moratorium,” “control share acquisition” or other form of antitakeover statute or regulation shall become applicable to the Merger or the other transactions contemplated hereby, each of the Company and Parent and the members of their respective Boards of Directors shall grant such approvals and take such actions as are reasonably necessary so that the transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of such statute or regulation on the Merger and the other transactions contemplated hereby.

     Section 5.8 Public Announcements. Parent and the Company agree to issue a joint press release announcing the execution of this Agreement.

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     Section 5.9 Indemnification and Insurance.

     (a) Parent and Merger Sub agree that all rights to exculpation, indemnification and advancement of expenses now existing in favor of the current or former directors, officers or employees, as the case may be, of the Company or its Subsidiaries as provided in their respective certificates of incorporation or by-laws or other organization documents or in any agreement shall survive the Merger and shall continue in full force and effect. For a period of six (6) years from the earlier of the Acceptance Date and the Effective Time, Parent and the Surviving Corporation shall maintain in effect the exculpation, indemnification and advancement of expenses provisions of the Company’s and any Company Subsidiary’s certificates of incorporation and by-laws or similar organization documents as in effect immediately prior to the earlier of the Acceptance Date and the Effective Time or in any indemnification agreements of the Company or its Subsidiaries with any of their respective directors, officers or employees as in effect immediately prior to the earlier of the Acceptance Date and the Effective Time, and shall not amend, repeal or otherwise modify any such provisions in any manner that would adversely affect the rights thereunder of any individuals who at the earlier of the Acceptance Date and the Effective Time were current or former directors, officers or employees of the Company or any of its Subsidiaries; provided, however, that all rights to indemnification in respect of any Action pending or asserted or any claim made within such period shall continue until the disposition of such Action or resolution of such claim. From and after the earlier of the Acceptance Date and the Effective Time, Parent shall cause the Surviving Corporation and its Subsidiaries to honor, in accordance with their respective terms, each of the covenants contained in this Section 5.9 without limit as to time.

     (b) From and after the earlier of the Acceptance Date and the Effective Time each of Parent and the Surviving Corporation shall, to the fullest extent permitted under applicable Law, indemnify and hold harmless (and advance funds in respect of each of the foregoing) each current and former director, officer or employee of the Company or any of its Subsidiaries (each, together with such person’s heirs, executors or administrators, an “Indemnified Party”) against any costs or expenses (including advancing reasonable attorneys’ fees and expenses in advance of the final disposition of any claim, suit, proceeding or investigation to each Indemnified Party to the fullest extent permitted by Law), judgments, fines, losses, claims, damages, liabilities and amounts paid in settlement in connection with any actual or threatened claim, action, suit, proceeding or investigation, whether civil, criminal, administrative or investigative (an “Action”), arising out of, relating to or in connection with any action or omission occurring or alleged to have occurred whether before or after the earlier of the Acceptance Date and the Effective Time (including acts or omissions in connection with such persons serving as an officer, director or other fiduciary in any entity if such service was at the request or for the benefit of the Company); provided, however, that neither Parent nor the Surviving Corporation shall be liable for any settlement effected without either Parent’s or the Surviving Corporation’s prior written consent (which shall not be unreasonably withheld or delayed) and Parent and the Surviving Corporation shall not be obligated to pay the fees and expenses of more than one counsel (selected by a plurality of the applicable Indemnified Parties) for all Indemnified Parties in any jurisdiction with respect to any single such claim, action, suit, proceeding or investigation, unless the use of one counsel for such Indemnified Parties would present such counsel with a conflict of interest that would make such joint representation inappropriate. It shall be a condition to the advancement of any amounts to be paid in respect of legal and other fees and expenses that

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Parent or the Surviving Corporation receive an undertaking by the Indemnified Party to repay such legal and other fees and expenses paid in advance if it is ultimately determined that such Indemnified Party is not entitled to be indemnified under applicable Law. In the event of any such Action, Parent and the Surviving Corporation shall reasonably cooperate with the Indemnified Party in the defense of any such Action.

     (c) For a period of six (6) years from the earlier of the Acceptance Date and the Effective Time, Parent shall either cause to be maintained in effect the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by the Company and its Subsidiaries or provide substitute policies or purchase or cause the Surviving Corporation to purchase, a “tail policy,” in either case of at least the same coverage and amounts containing terms and conditions that are not less advantageous in the aggregate than such policy with respect to matters arising on or before the earlier of the Acceptance Date and the Effective Time; provided, however, that after the earlier of the Acceptance Date and the Effective Time, Parent shall not be required to pay with respect to such insurance policies in respect of any one policy year annual premiums in excess of 300% of the last annual premium paid by the Company prior to the date hereof in respect of the coverage required to be obtained pursuant hereto, but in such case shall purchase as much coverage as reasonably practicable for such amount; and further provided that if the Surviving Corporation purchases a “tail policy” and the same coverage costs more than 500% of such last annual premium, the Surviving Corporation shall purchase the maximum amount of coverage that can be obtained for 500% of such last annual premium. At the Company’s option, the Company may purchase prior to the earlier of the Acceptance Date and the Effective Time, a six-year prepaid “tail policy” on terms and conditions providing substantially equivalent benefits as the current policies of directors’ and officers’ liability insurance and fiduciary liability insurance maintained by the Company and its Subsidiaries with respect to matters arising on or before the earlier of the Acceptance Date and the Effective Time, covering without limitation the transactions contemplated hereby; provided that the cost of such tail policy shall not exceed 500% of the last annual premium paid in respect of the current coverage. If such tail prepaid policy has been obtained by the Company prior to the Effective Time, Parent shall cause such policy to be maintained in full force and effect, for its full term, and cause all obligations thereunder to be honored by the Surviving Corporation.

     (d) Parent shall pay all reasonable expenses, including reasonable attorneys’ fees, that may be incurred by any Indemnified Party in enforcing the indemnity and other obligations provided in this Section 5.9.

     (e) The rights of each Indemnified Party hereunder shall be in addition to, and not in limitation of, any other rights such Indemnified Party may have under the certificates of incorporation or by-laws or other organization documents of the Company or any of its Subsidiaries or the Surviving Corporation, any other indemnification arrangement, the DGCL or otherwise. The provisions of this Section 5.9 shall survive the consummation of the Merger and expressly are intended to benefit, and are enforceable by, each of the Indemnified Parties.

     (f) In the event Parent, the Surviving Corporation or any of their respective successors or assigns (i) consolidates with or merges into any other person and shall not be the continuing or surviving corporation or entity in such consolidation or merger or (ii) transfers all or substantially all of its properties and assets to any person, then, and in either such case, proper

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provision shall be made so that the successors and assigns of Parent or the Surviving Corporation, as the case may be, shall assume the obligations set forth in this Section 5.9.

     Section 5.10 Control of Operations. Without in any way limiting any party’s rights or obligations under this Agreement, the parties understand and agree that nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s operations prior to the earlier of the Acceptance Date and the Effective Time. Prior to the earlier of the Acceptance Date and the Effective Time, the Company shall exercise, consistent with the terms and conditions of this Agreement, complete control and supervision over its operations.

     Section 5.11 Financing.

     (a) Parent shall use its reasonable best efforts to obtain the Financing on the terms and conditions described in the Financing Commitments, including using its reasonable best efforts (i) to negotiate definitive agreements with respect thereto on the terms and conditions contained in the Financing Commitments, (ii) to satisfy all conditions applicable to Parent in such definitive agreements, (iii) to comply with its obligations under the Financing Commitments, (iv) to enforce its rights under the Financing Commitments and (v) seeking such third party consents as may be reasonably required in connection with the Financing. Parent shall give the Company prompt notice upon becoming aware of any material breach by any party of the Financing Commitments or any termination of the Financing Commitments. Parent shall keep the Company informed on a prompt basis and in reasonable detail of the status of its efforts to arrange the Financing (including providing the Company with copies of all documents related to the Financing (other than ancillary agreements subject to confidentiality agreements)). In connection with its obligations under this Section 5.11, Parent shall be permitted to amend, modify or replace any portion of the Financing Commitments with new Financing Commitments, including through co-investment or by financing from one or more other additional parties (the “New Financing Commitments”), provided that Parent shall not permit any amendment or modification to be made to, or any waiver of any material provision or remedy under, the Financing Commitments if such replacement (including through co-investment by or financing from one or more other additional parties), amendment, modification, waiver or remedy reduces the aggregate amount of the Financing available to consummate the Offer and the Merger and the other transactions contemplated hereby, adversely amends or expands the conditions to the drawdown of the Financing in any respect that would make such conditions less likely to be satisfied, that can reasonably be expected to delay the Closing or is adverse to the interests of the Company in any other non de minimis respect. In the event that all conditions to the Financing Commitments (other than, in connection with the Debt Financing, the availability or funding of any of the Equity Financing) have been satisfied in Parent’s good faith judgment, Parent shall use its reasonable best efforts to cause the lenders and the other Persons providing such Financing to fund the Financing required to consummate the Offer on the Expiration Date and the Merger on the Closing Date. In the event that Parent becomes aware of any event or circumstance that makes procurement of any portion of the Financing unlikely to occur in the manner or from the sources contemplated in the Financing Commitments, Parent shall promptly notify the Company and shall use its reasonable best efforts to arrange as promptly as practicable any such portion from alternative sources (including through co-investment by one or more additional parties) with terms and conditions no less favorable from the standpoint of Parent and Merger Sub and no more adverse to the ability of Parent and Merger Sub to consummate the

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transactions contemplated by this Agreement. Parent and Merger Sub acknowledge and agree that their respective obligations to consummate the Agreement are not conditioned or contingent upon receipt of the Financing. In the event that Parent organizes any other subsidiaries to participate in the Financing of the transactions contemplated by this Agreement, (i) all of the capital stock of such subsidiaries will be owned directly or indirectly by Parent, (ii) Parent will cause each such subsidiary to perform their respective obligations under the Debt Commitment Letter including, without limitation, funding the Tender Facility Interest Support, if necessary, as described in the Debt Commitment Letter, and (iii) Parent will cause such subsidiaries to become a party to this Agreement to the extent necessary to ensure that such subsidiaries become obligated to provide Merger Sub with the funds required to fulfill its obligations under this Agreement, including the payment of the Per Share Amount, the Merger Consideration and the Option and Stock-Based Consideration (and any fees and expenses of or payable by Merger Sub or the Surviving Corporation).

     (b) The Company will and will cause its Subsidiaries to and will use reasonable efforts to cause each of its and their respective Representatives, including legal and accounting, to provide all cooperation reasonably requested by Parent in connection with the Financing and the other transactions contemplated by this Agreement (provided that such requested cooperation does not unreasonably interfere with the ongoing operations of the Company and its Subsidiaries), including (i) providing to the parties providing the Financing all financial statements and other information relating to the Company and its Subsidiaries that are customarily required for financings similar to the Tender Facility or the Take-Out Facilities (each as defined in the Debt Commitment Letter), as applicable, and using reasonable best efforts to provide such other financial information as Parent shall reasonably request in order to consummate the Debt Financing, (ii) participating in a reasonable number of meetings, drafting sessions and due diligence sessions in connection with the Financing, (iii) assisting in the preparation of (A) one or more offering documents or confidential information memoranda for any of the Debt Financing (including the execution and delivery of one or more customary representation letters in connection therewith); provided that any such memoranda and similar documents need not be issued by the Company or any of its Subsidiaries; provided, further, that any such memoranda shall contain disclosure and financial statements with respect to the Company or the Surviving Corporation reflecting the Surviving Corporation and/or its Subsidiaries as the obligor and (B) materials for rating agency presentations, (iv) reasonably cooperating with the marketing efforts for any of the Debt Financing, including providing assistance in the preparation for, and participating in, meetings, due diligence sessions and similar presentations to and with, among others, prospective lenders, investors and rating agencies, and (v) executing and delivering (or using reasonable best efforts to obtain from advisors), and causing its Subsidiaries to execute and deliver (or use reasonable best efforts to obtain from advisors) or obtain from advisors, customary certificates (including a certificate of the chief financial officer of the Company with respect to solvency matters), accounting comfort letters, legal opinions (which may be reasoned if circumstances require), surveys, title insurance or other documents and instruments relating to guarantees, the pledge of collateral and other matters ancillary to the Financing as may be reasonably requested by Parent in connection with the Financing and otherwise reasonably facilitating the pledge of collateral and providing of guarantees contemplated by the Debt Commitment Letter; provided, however, that no obligation of the Company or any of its Subsidiaries under any such certificate, document or instrument (other than the representation letter referred to above) shall be effective until the Effective Time.

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The foregoing notwithstanding, (x) no pre-Closing director shall be required to take any action with respect to the foregoing and neither the Company nor any of its Subsidiaries shall be obligated to take any action that requires action or approval by the pre-Closing directors, (y) no obligation of the Company or any of its Subsidiaries or Representatives under any agreement, certificate, document or instrument shall be effective until the Effective Time, and (z) none of the Company or any of its Subsidiaries or Representatives shall be required to pay any commitment or other similar fee or incur any other cost or expense that is not simultaneously reimbursed by Parent in connection with the Debt Financing prior to the Effective Time. Parent shall upon request by the Company reimburse the Company for all reasonable out-of-pocket costs incurred by the Company or its Subsidiaries in connection with such cooperation and shall indemnify and hold harmless the Company, its Subsidiaries and their respective Representatives for and against any and all losses suffered or incurred by them in connection with the arrangement of the Debt Financing and any information utilized in connection therewith (other than information provided by the Company or its Subsidiaries) (such costs and losses, the “Company Financing Expenses”), provided, that Parent’s obligation to pay such Company Financing Expenses after the termination of this Agreement shall be subject to the limitations set forth in the last sentence of Section 7.3(e) . Any other provision hereof notwithstanding, neither the Company nor any of its Subsidiaries, Affiliates or Representatives shall be required to incur any cost, fee, expense or liability in excess of $250,000 in the aggregate for all such Persons for all such costs, fees, expenses or liabilities in connection with Section 5.11, except to the extent the Cap of the Guarantee is increased in respect of such additional amounts. All non-public or otherwise confidential information regarding the Company obtained by Parent, Merger Sub or their Representatives pursuant to this Section 5.11 shall be kept confidential in accordance with the Confidentiality Agreement.

     Section 5.12 Stockholder Litigation. The Company shall give Parent the opportunity to participate, subject to a customary joint defense agreement, in, but not control, the defense or settlement of any stockholder litigation against the Company or its directors or officers relating to the Offer, the Merger or any other transactions contemplated hereby; provided, however, that no such settlement shall be agreed to without Parent’s consent. In the event that (i) a proposed settlement of any stockholder litigation (of which Parent has been advised and kept informed in accordance with the terms of this Section 5.12) would not have a Company Material Adverse Effect, (ii) Parent does not consent to such proposed settlement and (iii) the ultimate resolution of such litigation is less favorable to the Company and its Subsidiaries than such proposed settlement, then such resolution and the effects thereof on the Company and its Subsidiaries (to the extent so less favorable) shall not constitute, or be considered in determining the existence or occurrence of, a Company Material Adverse Effect.

     Section 5.13 Notification of Certain Matters. The Company shall give prompt notice to Parent, and Parent shall give prompt notice to the Company, of (i) any notice or other communication received by such party from any Governmental Entity in connection with the Offer, the Merger or the other transactions contemplated hereby or from any person alleging that the consent of such person is or may be required in connection with the Offer, the Merger or the other transactions contemplated hereby, if the subject matter of such communication or the failure of such party to obtain such consent could be material to the Company, the Surviving Corporation or Parent, (ii) any actions, suits, claims, investigations or proceedings commenced or, to such party’s knowledge, threatened against, relating to or involving or otherwise affecting

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such party or any of its Subsidiaries which relate to the Offer, the Merger or the other transactions contemplated hereby, (iii) the discovery of any fact or circumstance that, or the occurrence or non-occurrence of any event the occurrence or non-occurrence of which, would cause or result in any of the Tender Offer Conditions or any of the conditions set forth in Article VI not being satisfied or satisfaction of those conditions being materially delayed in violation of any provision of this Agreement; provided, however, that the delivery of any notice pursuant to this Section 5.13 shall not (x) cure any breach of, or non-compliance with, any other provision of this Agreement or (y) limit the remedies available to the party receiving such notice. The Company shall notify Parent, on a reasonably current basis, of any events or changes with respect to any material regulatory or other investigation or action involving the Company or any of its affiliates by any Governmental Entity, and shall reasonably cooperate with Parent or its affiliates in efforts to mitigate any adverse consequences to Parent or its affiliates which may arise (including by coordinating and providing assistance in meeting with regulators). The parties agree and acknowledge that, except with respect to clause (iii) of the first sentence of this Section 5.13, the Company’s compliance or failure of compliance with this Section 5.13 shall not be taken into account for purposes of determining whether the condition referred to in paragraph (d) of Annex III shall have been satisfied.

     Section 5.14 Private Placement Notes; Credit Agreement. At the written request of Parent, the Company shall, to the extent permitted by the terms thereof, take all actions reasonably requested by Parent that are necessary or advisable, including the delivery of all such notices, certificates and other documents pursuant to each note purchase agreement and each other agreement governing the respective Private Placement Notes, to repay all of the Private Placement Notes outstanding on the Closing Date in accordance with the applicable provisions of such agreements; provided that the Company shall not be required to provide any irrevocable notice or take any other irrevocable act regarding such repurchase unless (i) such action is taken simultaneously with the Merger being consummated and (ii) prior to the Company’s being required to take any of the actions described in this proviso, Parent shall have, or shall have caused to be, deposited with the trustee, or other appropriate recipient of such funds, under the applicable agreement governing the Private Placement Notes, sufficient funds to effect such repayment. The repayment of such Private Placement Notes shall not be required to be effective prior to the Effective Time and shall be expressly conditioned on the occurrence of the Effective Time. Parent hereby covenants and agrees to provide (or to cause to be provided) immediately available funds for the full payment at the Effective Time of all Private Placement Notes properly tendered and not withdrawn. The Company shall provide Parent with a reasonable period of time to review and comment on all notices, certificates and other documents to be delivered to holders of any of the Private Placement Notes (each of which notice, certificate and document shall be delivered contemporaneously to Parent) and each such notice, certificate and document shall be subject to the prior written approval of Parent. Notwithstanding any other provision of this Agreement, the Company shall have no obligation under any such notice, certificate or other document until the Effective Time, and Parent shall upon request by the Company promptly reimburse the Company for all reasonable out-of-pocket costs incurred by the Company in connection with the repayment of the Private Placement Notes and shall indemnify and hold harmless the Company and its Representatives for and against any and all losses suffered or incurred by them, or to which any of the Company or its Representatives may become subject, arising out of or in any way in connection with the repayment or any actions taken, or not taken, by the Company or its Representatives pursuant to this Section 5.14 (such

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costs and losses, the “Company Note Repurchase Expenses”), provided, that Parent’s obligation to pay such Company Note Repurchase Expenses after the termination of this Agreement shall be subject to the limitations set forth in the last sentence of Section 7.3(e) . The Company shall use its reasonable best efforts to take the action referred to in Section 5.14 of the Company Disclosure Letter. Any other provision hereof notwithstanding, neither the Company nor any of its Subsidiaries shall be required to incur any cost, fee, expense or liabilities in excess of $250,000 in the aggregate for all such Persons for all such costs, fees, expenses or liabilities in connection with this Section 5.14, except to the extent the Cap of the Guarantee is increased in respect of such additional amounts. The parties agree and acknowledge that the Company’s compliance or failure of compliance with this Section 5.14 shall not be taken into account for purposes of determining whether the condition referred to in paragraph (d) of Annex III shall have been satisfied. The Company shall be deemed to have satisfied each of its obligations set forth in this Section 5.14 if the Company shall have used its reasonable best efforts to comply with such obligations, regardless of the actual outcome of any actions in respect of the Private Placement Notes or the Credit Agreement.

ARTICLE VI

CONDITIONS TO THE MERGER

     Section 6.1 Conditions to Each Party’s Obligation to Effect the Merger. The respective obligations of each party to effect the Merger shall be subject to the fulfillment (or waiver by Parent and the Company) at or prior to the Effective Time of only the following conditions:

     (a) Unless the Merger is consummated pursuant to Section 253 of the DGCL, the Company Stockholder Approval shall have been obtained.

     (b) No Governmental Entity of competent jurisdiction shall have enacted, issued or entered any restraining order, preliminary or permanent injunction or similar order or legal restraint or prohibition which remains in effect that enjoins or otherwise prohibits consummation of the Merger.

     (c) Merger Sub shall have accepted for purchase the Shares tendered pursuant to the Offer in accordance with the terms hereof and thereof, provided that this condition shall be deemed satisfied if Merger Sub shall have failed, in breach of this Agreement, to accept for purchase any Shares tendered pursuant to the Offer.

ARTICLE VII

TERMINATION

     Section 7.1 Termination or Abandonment. Anything contained in this Agreement to the contrary notwithstanding, this Agreement may be terminated and the Offer or the Merger may be abandoned at any time prior to the Effective Time, whether before or after any approval by the stockholders of the Company of the matters presented in connection with the Merger:

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     (a) by the mutual written consent of the Company and Parent;

     (b) by either the Company or Parent, prior to the purchase of Shares pursuant to the Offer, if (i) the Effective Time shall not have occurred on or before June 30, 2007, (the “End Date”) and (ii) the party seeking to terminate this Agreement pursuant to this Section 7.1(b) shall not have breached in any material respect its obligations under this Agreement in any manner that shall have proximately caused the failure to consummate the Merger on or before such date;

     (c) by either the Company or Parent if any court of competent jurisdiction shall have issued or entered an injunction or similar legal restraint or order permanently enjoining or otherwise prohibiting the consummation of the Offer or the Merger, and such injunction, legal restraint or order shall have become final and non-appealable, provided that the party seeking to terminate this Agreement pursuant to this Section 7.1(c) shall have used such efforts as may be required by Section 5.6 to prevent, oppose and remove such injunction;

     (d) by either the Company or Parent, at any time after March 16, 2007, if, as of the then most recent Expiration Date occurring on or after March 16, 2007, all of the Tender Offer Conditions (other than the Minimum Condition) were satisfied for at least two consecutive Business Days prior to such Expiration Date, and as of the expiration time on such Expiration Date, the Minimum Condition is not satisfied;

     (e) by the Company, if Parent or Merger Sub shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (A) would give rise to a Parent Material Adverse Effect or would result in a failure of a condition set forth in Section 6.1 or Annex III to be satisfied or the failure of the Acceptance Date or the Closing to occur and (B) cannot be cured by the End Date, provided that the Company shall have given Parent written notice, delivered at least thirty (30) days prior to such termination, stating the Company’s intention to terminate this Agreement pursuant to this Section 7.1(e) and the basis for such termination;

     (f) by Parent, if the Company shall have breached or failed to perform any of its representations, warranties, covenants or other agreements contained in this Agreement, which breach or failure to perform (A) would result in a failure of a condition set forth in paragraphs (c) or (d) of Annex III or Section 6.1 to be satisfied or failure of the Offer to be consummated and (B) cannot be cured by the End Date, provided that Parent shall have given the Company written notice, delivered at least thirty (30) days prior to such termination, stating Parent’s intention to terminate this Agreement pursuant to this Section 7.1(f) and the basis for such termination;

     (g) by the Company in order to enter into a transaction that is a Superior Proposal, if, prior to the Acceptance Date, (A) the Board of Directors (or the Special Committee) has received a Superior Proposal, (B) the Company has notified Parent in writing of its intention to terminate this Agreement pursuant to this Section 7.1(g) and included with such notice the most current written agreement relating to the transaction that constitutes such Superior Proposal, (C) at least 5 Business Days following receipt by Parent of the notice referred to in clause (B) above, and taking into account any revised proposal made by Parent since receipt of the notice referred to in clause (B) above, the Board of Directors (or the Special Committee) shall have determined that such revised proposal is not at least as favorable to the stockholders of the Company as such

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Superior Proposal, and (D) prior to or concurrently with such termination, the Company pays the fee due under Section 7.3;

     (h) by the Company, if (i) the Merger shall not have been consummated within five (5) Business Days of the first date upon which all conditions set forth in Section 6.1 are satisfied and at the time of such termination such conditions continue to be satisfied; provided that the Company shall not terminate this Agreement under this Section 7.1(h)(i) before the 25th Business Day after the date hereof; (ii) Merger Sub shall have terminated the Offer or failed to extend the Offer to the extent required by Section 1A.1(d) (in either case, other then in connection with a valid termination of this Agreement in accordance with Section 7.1); or (iii) at any Expiration Date, Merger Sub shall fail to accept for payment and pay for Shares validly tendered and not withdrawn in the Offer subject to the terms of and in accordance with Section 1A.1(e);

     (i) by Parent, prior to the purchase of Shares in the Offer, if the Board of Directors or the Special Committee withdraws, modifies or qualifies in a manner adverse to Parent or Merger Sub, or publicly proposes to withdraw, modify or qualify, in a manner adverse to Parent or Merger Sub, its Recommendation, or approves, endorses or recommends, or publicly proposes to approve, endorse or recommend, any Alternative Proposal; or

     (j) by Parent, if since the date of this Agreement and prior to the purchase of Shares in the Offer there shall have been a Company Material Adverse Effect that cannot be cured by the End Date.

     Section 7.2 Effect of Termination. In the event of termination of this Agreement pursuant to Section 7.1, this Agreement shall forthwith become null and void and there shall be no liability or obligation on the part of the Company, Parent, Merger Sub or their respective Subsidiaries or affiliates, except that the Confidentiality Agreement, the Guarantee and the provisions of Section 7.3 and Article VIII will survive the termination hereof; provided, however, that nothing herein shall relieve any party from liability for willful breach of this Agreement, in which case the aggrieved party shall, subject to the limitations on liability set forth elsewhere herein, be entitled to all rights and remedies available at law or in equity.

     Section 7.3 Termination Fees.

     (a) In the event that:

          (i) (A) after the date of this Agreement, any Alternative Proposal (substituting 40% for the 20% threshold set forth in the definition of “Alternative Proposal”) (a “Qualifying Transaction”) is or continues to be publicly proposed or publicly disclosed, (B) this Agreement is terminated by Parent pursuant to Section 7.1(f) (so long as a proposal regarding a Qualifying Transaction remains outstanding at the time of the event giving rise to the termination) or by Parent or the Company pursuant to Section 7.1(d) (so long as a proposal regarding a Qualifying Transaction remains outstanding as of the most recent Expiration Date referred to in Section 7.1(d)), and (C) the Company enters into a definitive agreement with respect to, or consummates, a

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transaction contemplated by any proposal regarding a Qualifying Transaction within twelve (12) months of the date this Agreement is terminated;

          (ii) this Agreement is terminated by the Company pursuant to Section 7.1(g); or

          (iii) this Agreement is terminated by Parent pursuant to Section 7.1(i) .

then in any such event under clause (i), (ii) or (iii) of this Section 7.3(a), the Company shall pay to TC Group IV, L.L.C. a termination fee of $29.0 million in cash (the “Termination Fee”), it being understood that in no event shall the Company be required to pay the Termination Fee on more than one occasion.

     In the event that a proposal regarding a Qualifying Transaction shall have been made known to the public or shall have been made directly to the stockholders of the Company generally or any Person shall have publicly announced an intention (whether or not conditional or withdrawn) to make a proposal regarding a Qualifying Transaction that reasonably appears to be bona fide and thereafter this Agreement is terminated by the Company or Parent pursuant to Section 7.1(d) and no Termination Fee is yet payable in respect thereof pursuant to Section 7.3(a)(i), then the Company shall pay to Parent all of the Expenses (as hereinafter defined) of Parent and Merger Sub and thereafter if the Company becomes obligated to pay to Parent the Termination Fee pursuant to Section 7.3(a)(i) such payment obligation shall be reduced by the amount of Expenses previously actually paid to Parent pursuant to this sentence. As used herein, “Expenses” shall mean all reasonable out-of-pocket documented fees and expenses (including all fees and expenses of counsel, accountants, consultants, financial advisors and investment bankers of Parent and its Affiliates), incurred by Parent or Merger Sub or on their behalf in connection with or related to the authorization, preparation, negotiation, execution and performance of this Agreement and the Financing and all other matters related to the Merger; provided that such fees and expenses shall not in any case exceed $10 million in the aggregate.

     (b) Any provision in this Agreement to the contrary notwithstanding, in the event that (i) the Company shall terminate this Agreement pursuant to Section 7.1(e) and at the time of such termination there is no state of facts or circumstances (excluding the breach by Parent or Merger Sub or the public announcement by the Company of such breach (each, a “Breach Fact”)) that would reasonably be expected to cause the conditions set forth in Annex III (other than clause (b) thereof) and Section 6.1(b) not to be satisfied on the End Date assuming the Expiration Date and the Closing were to be scheduled on the End Date, (ii) the Company shall terminate this Agreement pursuant to Section 7.1(h), or (iii) Parent or the Company shall terminate this Agreement pursuant to Section 7.1(b) and, at the time of such termination, the conditions set forth in Annex III (other than clause (b) thereof) have been satisfied (other than where a Breach Fact would reasonably be deemed to have caused the failure of any such condition to be satisfied), then in any such case Parent shall pay to the Company a fee of $35 million in cash (the “Parent Termination Fee”), it being understood that in no event shall Parent be required to pay the Parent Termination Fee on more than one occasion. The Parent Termination Fee shall be paid to the Company concurrent with termination of this Agreement by Parent or not later than

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two (2) Business Days following termination of this Agreement by the Company, as the case may be.

     (c) Any payment required to be made pursuant to clause (i) of Section 7.3(a) shall be made to Parent promptly following the earlier of the execution of a definitive agreement with respect to, or the consummation of, any Qualifying Transaction (and in any event not later than two Business Days after delivery to the Company of notice of demand for payment); any payment required to be made pursuant to clause (ii) of Section 7.3(a) shall be made to Parent concurrently with, and as a condition to the effectiveness of, the termination of this Agreement by the Company pursuant to Section 7.1(g); any payment required to be made pursuant to clause (iii) of Section 7.3(a) shall be made promptly following termination of this Agreement by Parent (and in any event not later than two Business Days after delivery to the Company of notice of demand for payment); and any such payment shall be made by wire transfer of immediately available funds to an account to be designated by Parent. In circumstances in which Expenses are payable, such payment shall be made to Parent not later than two Business Days after delivery to the Company of an itemization setting forth in reasonable detail all Expenses (which itemization may be supplemented and updated from time to time by Parent until the 60^th day after Parent delivers such notice of demand for payment), and all such payments shall be made by wire transfer of immediately available funds to an account to be designated by Parent.

     (d) In the event that the Company shall fail to pay the Termination Fee and/or Expenses, or Parent shall fail to pay the Parent Termination Fee, required pursuant to this Section 7.3 when due, such fee and/or Expenses, as the case may be, shall accrue interest for the period commencing on the date such fee became past due, at a rate equal to the rate of interest publicly announced by Citibank, in the City of New York from time to time during such period, as such bank’s Prime Lending Rate (the “Interest Rate”). In addition, if either party shall fail to pay such fee and/or Expenses, as the case may be, when due, the such owing party shall also pay to the owed party all of the owed party’s costs and expenses (including attorneys’ fees) in connection with efforts to collect such fee and/or Expenses, as the case may be. Parent and the Company acknowledges that the fees, Expense reimbursement and the other provisions of this Section 7.3 are an integral part of the Offer and the Merger and that, without these agreements, Parent and the Company would not enter into this Agreement.

     (e) Each of the parties hereto acknowledges that the agreements contained in this Section 7.3 are an integral part of the transactions contemplated by this Agreement and that neither the Termination Fee nor the Parent Termination Fee is a penalty, but rather is liquidated damages in a reasonable amount that will compensate Parent and Merger Sub or the Company, as the case may be, for the efforts and resources expended and opportunities foregone while negotiating this Agreement and in reliance on this Agreement and on the expectation of the consummation of the transactions contemplated hereby, which amount would otherwise be impossible to calculate with precision. Notwithstanding anything to the contrary in this Agreement, the Company’s right to receive payment of the Parent Termination Fee pursuant to this Section 7.3 or the guarantee thereof pursuant to the Guarantee and to require that Parent, Merger Sub and Guarantor perform their respective obligations under (i) Section 7.3 and the Guarantee in accordance with their terms, (ii) to pay the Company Financing Expenses and (iii) to pay the Company Note Repayment Expenses shall be the exclusive remedy of the Company against Parent, Merger Sub, Guarantor or any of their respective stockholders, partners,

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members, directors, Affiliates, officers or agents for (x) the loss suffered as a result of any failure of the Merger to be consummated and (y) any other losses, damages, obligations or liabilities suffered as a result of or under this Agreement and the transactions contemplated hereby, and none of Parent, Merger Sub, Guarantor or any of their respective stockholders, partners, members, directors, officers or agents, as the case may be, shall have any liability or obligation relating to or arising out of this Agreement or the transactions contemplated hereby other than any such liability in respect of the Parent Termination Fee and the Guarantee, provided, however, that Parent shall be obligated with respect to Sections 5.2(b) and the last sentence of Section 5.11(b); and provided further, however, that Parent, Merger Sub and Guarantor shall be relieved of any liability for the Company Financing Expenses and the Company Note Repayment Expenses in the event this Agreement is terminated in a circumstance in which the Termination Fee is payable or would become payable upon the occurrence of the event referred to Section 7.3(a)(i)(C) and provided further that nothing herein shall relieve Parent or Merger Sub of liability to pay for Shares accepted for payment in the Offer.

ARTICLE VIII

MISCELLANEOUS

     Section 8.1 No Survival of Representations and Warranties. None of the representations and warranties in this Agreement or in any instrument delivered pursuant to this Agreement shall survive the earlier of the Acceptance Date and the Effective Time.

     Section 8.2 Expenses. Except as set forth in Section 7.3 or in the Guarantee, whether or not the Merger is consummated, all costs and expenses incurred in connection with the Merger, this Agreement and the transactions contemplated hereby shall be paid by the party incurring or required to incur such expenses, except that expenses incurred in connection with the printing, filing and mailing of the Proxy Statement (including applicable SEC filing fees) and all fees paid in respect of any regulatory filings shall be borne one half by Parent and one half by the Company.

     Section 8.3 Counterparts; Effectiveness. This Agreement may be executed in two or more consecutive counterparts (including by facsimile), each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument, and shall become effective when one or more counterparts have been signed by each of the parties and delivered (by telecopy or otherwise) to the other parties.

     Section 8.4 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

     Section 8.5 Jurisdiction; Enforcement. The parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that prior to the valid and effective termination of this Agreement in accordance with Article VII the parties shall be entitled to an injunction or injunctions to prevent breaches of this Agreement and

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to enforce specifically the terms and provisions of this Agreement exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware). The parties agree that (a) the Company shall be entitled to specific performance against Parent and Merger Sub (i) of Parent’s or Merger Sub’s obligations to pay the Parent Termination Fee pursuant to Section 7.3(b) and their respective obligations in respect of the Company Financing Expenses and the Company Note Repayment Expenses and (ii) to prevent any breach by Parent or Merger Sub of Section 5.2(b) and the last sentence of Section 5.11(b) or by Parent or Merger Sub of the obligation to pay for any Shares accepted for payment in the Offer and (b) Parent shall be entitled to specific performance against the Company of the Company’s obligation to pay the Termination Fee and the Expenses pursuant to Section 7.3(a) . In addition, each of the parties hereto irrevocably agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party hereto or its successors or assigns, shall be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware). Each of the parties hereto hereby irrevocably submits with regard to any such action or proceeding for itself and in respect of its property, generally and unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the aforesaid courts. Each of the parties hereto hereby irrevocably waives, and agrees not to assert as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this Section 8.5, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by the applicable Law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts.

     Section 8.6 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

     Section 8.7 Notices. Any notice required to be given hereunder shall be sufficient if in writing, and sent by facsimile transmission (provided that any notice received by facsimile transmission or otherwise at the addressee’s location on any Business Day after 5:00 p.m. (addressee’s local time) shall be deemed to have been received at 9:00 a.m. (addressee’s local time) on the next Business Day), by reliable overnight delivery service (with proof of service), hand delivery or certified or registered mail (return receipt requested and first-class postage prepaid), addressed as follows:

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To Parent or Merger Sub:

c/o The Carlyle Group

1001 Pennsylvania Avenue, NW

Suite 220 South

Washington, DC 20004

Facsimile: (202) 347-1818

Attention: Glenn A. Youngkin

with a copy to:

Debevoise & Plimpton LLP

919 Third Avenue

New York, New York 10022

Facsimile: (212) 909-6836

Attention: Paul S. Bird, Esq.

To the Company:

ElkCorp

14911 Quorum Drive

Suite 600

Dallas, TX 75254

Facsimile: (972) 851-0552

Attention: David G. Sisler, Esq.

with a copy to:

Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019

Facsimile: (212) 403-2000

Attention: Mark Gordon, Esq.

     or to such other address as any party shall specify by written notice so given, and such notice shall be deemed to have been delivered as of the date so telecommunicated, personally delivered or received. Any party to this Agreement may notify any other party of any changes to the address or any of the other details specified in this paragraph; provided, however, that such notification shall only be effective on the date specified in such notice or two (2) Business Days after the notice is given, whichever is later. Rejection or other refusal to accept or the inability to

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deliver because of changed address of which no notice was given shall be deemed to be receipt of the notice as of the date of such rejection, refusal or inability to deliver.

     Section 8.8 Assignment; Binding Effect. Neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other parties, except that Merger Sub may assign, in its sole discretion, any of or all of its rights, interest and obligations under this agreement to Parent or to any direct or indirect wholly-owned subsidiary of Parent, but no such assignment shall relieve Merger Sub of its obligations hereunder. Subject to the preceding sentence, this Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns. Parent shall cause Merger Sub, and any assignee thereof, to perform its obligations under this Agreement.

     Section 8.9 Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the sole extent of such invalidity or unenforceability without rendering invalid or unenforceable the remainder of such term or provision or the remaining terms and provisions of this Agreement in any jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, such provision shall be interpreted to be only so broad as is enforceable.

     Section 8.10 Entire Agreement; No Third-Party Beneficiaries. This Agreement (including the exhibits and schedules hereto), the Guarantee and the Confidentiality Agreement constitute the entire agreement, and supersede all other prior agreements and understandings, both written and oral, between the parties, or any of them, with respect to the subject matter hereof and thereof and, except for the provisions of Article II (which, from and after the Effective Time, shall be for the benefit of holders of the Shares and Company Options as of the Effective Time), Sections 1A.1(d) and (e) (which, from and after the Acceptance Date, shall be for the benefit of holders whose Shares are accepted for payment in the Offer or in any subsequent offering period), and Section 5.9 (which shall be for the benefit of the Indemnified Parties), is not intended to and shall not confer upon any person other than the parties hereto any rights or remedies hereunder.

     Section 8.11 Amendments; Waivers. At any time prior to the Effective Time, any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by the Company, Parent and Merger Sub, or in the case of a waiver, by the party against whom the waiver is to be effective; provided, however, that after receipt of the Company Stockholder Approval, if applicable, if any such amendment or waiver shall by applicable Law or in accordance with the rules and regulations of the New York Stock Exchange require further approval of the stockholders of the Company, the effectiveness of such amendment or waiver shall be subject to the approval of the stockholders of the Company. Notwithstanding the foregoing, no failure or delay by the Company or Parent in exercising any right hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise of any other right hereunder.

     Section 8.12 Headings. Headings of the Articles and Sections of this Agreement are for convenience of the parties only and shall be given no substantive or interpretive effect

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whatsoever. The table of contents to this Agreement is for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

     Section 8.13 Interpretation. When a reference is made in this Agreement to an Article or Section, such reference shall be to an Article or Section of this Agreement unless otherwise indicated. Whenever the words “include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant thereto unless otherwise defined therein. The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such term. Any agreement, instrument or statute defined or referred to herein or in any agreement or instrument that is referred to herein means such agreement, instrument or statute as from time to time amended, modified or supplemented, including (in the case of agreements or instruments) by waiver or consent and (in the case of statutes) by succession of comparable successor statutes and references to all attachments thereto and instruments incorporated therein. Each of the parties has participated in the drafting and negotiation of this Agreement. If an ambiguity or question of intent or interpretation arises, this Agreement must be construed as if it is drafted by all the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of authorship of any of the provisions of this Agreement.

     Section 8.14 No Recourse. This Agreement may only be enforced against, and any claims or causes of action that may be based upon, arise out of or relate to this Agreement, or the negotiation, execution or performance of this Agreement may only be made against the entities that are expressly identified as parties hereto or the Guarantor and no past, present or future Affiliate, director, officer, employee, incorporator, member, manager, partner, stockholder, agent, attorney or representative of any party hereto (other than the Guarantor) shall have any liability for any obligations or liabilities of the parties to this Agreement or for any claim based on, in respect of, or by reason of, the transactions contemplated hereby. Notwithstanding anything to the contrary contained herein, the Company agrees that to the extent it has incurred damages in connection with this Agreement, the maximum liability of the Guarantor, directly or indirectly, shall be limited to the Cap under the Guarantee.

     Section 8.15 Definitions. References in this Agreement to specific laws or to specific provisions of laws shall include all rules and regulations promulgated thereunder. Any statute defined or referred to herein or in any agreement or instrument referred to herein shall mean such statute as from time to time amended, modified or supplemented, including by succession of comparable successor statutes. For purposes of this Agreement, the following terms (as capitalized below) will have the following meanings when used herein:

          “1993 Plan” has the meaning set forth in Section 3.2(a).

          “1998 Plan” has the meaning set forth in Section 3.2(a).

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          “2002 Plan” has the meaning set forth in Section 3.2(a).

          “2004 Plan” has the meaning set forth in Section 3.2(a).

          “Acceptance Date” has the meaning set forth in Section 1A.1(e).

          “Action” has the meaning set forth in Section 5.9(b).

          “affiliates” means, with respect to any person, any other person which, directly or indirectly, controls, or is controlled by, or is under common control with, such person. As used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise.

          “Affiliate Transaction” has the meaning set forth in Section 3.23.

          “Agreement” has the meaning set forth in the Preamble.

          “Alternative Proposal” has the meaning set forth in Section 5.3(g).

          “Board of Directors” has the meaning set forth in the Recitals.

          “Book-Entry Shares” has the meaning set forth in Section 2.2(a).

          “Breach Fact” has the meaning set forth in Section 7.3(b).

          “Business Day” has the meaning set forth in Section 1A.1(d).

          “Cancelled Shares” has the meaning set forth in Section 2.1(b).

          “Cap” has the meaning set forth in the Guarantee.

          “Certificate of Merger” has the meaning set forth in Section 1.3.

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          “Certificates” has the meaning set forth in Section 2.2(a).

          “Citigroup” has the meaning set forth in Section 3.19.

          “Closing” has the meaning set forth in Section 1.2.

          “Closing Date” has the meaning set forth in Section 1.2.

          “Code” has the meaning set forth in Section 2.2(b)(iii).

          “Company” has the meaning set forth in the Preamble.

          “Company Benefit Plans” has the meaning set forth in Section 3.10(a).

          “Company Disclosure Letter” has the meaning set forth in Article III.

          “Company Employees” has the meaning set forth in Section 5.5(a).

          “Company Financing Expenses” has the meaning set forth in Section 5.11(b).

          “Company Material Adverse Effect” has the meaning set forth in Section 3.1(c).

          “Company Meeting” has the meaning set forth in Section 5.4(b).

          “Company Note Repurchase Expenses” has the meaning set forth in Section 5.14.

          “Company Permits” has the meaning set forth in Section 3.8(b).

          “Company SEC Documents” has the meaning set forth in Section 3.5(a).

          “Company Specified Contracts” has the meaning set forth in Section 3.21(a).

          “Company Stock Options” has the meaning set forth in Section 2.3(a).

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          “Company Stock Plans” has the meaning set forth in Section 2.3(a).

          “Company Stockholder Approval” has the meaning set forth in Section 3.20.

          “Confidentiality Agreement” has the meaning set forth in Section 5.2(b).

          “Credit Agreement” means the Credit Agreement, dated as of November 30, 2000, among the Company, Bank of America, N.A., Bank One, Texas, N.A., First Union National Bank, Banc of America Securities LLC and the other lender parties thereto.

          “Debt Commitment Letter” has the meaning set forth in Section 4.5.

          “Debt Financing” has the meaning set forth in Section 4.5.

          “DGCL” has the meaning set forth in Section 1A.2(a).

          “Dissenting Shares” has the meaning set forth in Section 2.1(d).

          “Effective Time” has the meaning set forth in Section 1.3.

          “Employees” has the meaning set forth in Section 3.16.

          “End Date” has the meaning set forth in Section 7.1(b).

          “Environmental Law” has the meaning set forth in Section 3.9(a).

          “Equity Commitment Letter” has the meaning set forth in Section 4.5.

          “ERISA” has the meaning set forth in Section 3.10(a).

          “ERISA Affiliate” has the meaning set forth in Section 3.10(c).

          “Exchange Act” has the meaning set forth in Section 1A.1(a).

          “Exchange Fund” has the meaning set forth in Section 2.2(a).

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          “Existing Confidentiality Agreement” means the confidentiality agreement by and among the Company, Heyman Investment Associates Limited Partnership and Building Materials Corporation of America, dated as of December 29, 2006.

          “Expenses” has the meaning set forth in Section 7.3(a).

          “Expiration Date” has the meaning set forth in Section 1A.1(d).

          “Financing” has the meaning set forth in Section 4.5.

          “Financing Commitments” has the meaning set forth in Section 4.5.

          “GAAP” means United States generally accepted accounting principles.

          “Governmental Entity” has the meaning set forth in Section 3.4(b).

          “Guarantee” has the meaning set forth in Section 4.6.

          “Guarantor” has the meaning set forth in Section 4.6.

          “Hazardous Substance” has the meaning set forth in Section 3.9(b).

          “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and the rules and regulations promulgated thereunder.

          “Indemnified Party” has the meaning set forth in Section 5.9(b).

          “Independent Directors” has the meaning set forth in Section 1A.3.

          “Information Memorandum” has the meaning set forth in Section 4.10.

          “Intellectual Property” has the meaning set forth in Section 3.17.

          “Interest Rate” has the meaning set forth in Section 7.3(d).

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          “knowledge” means (a) with respect to Parent, the knowledge of the executive officers of Parent after reasonable inquiry and (b) with respect to the Company, the knowledge of the individuals listed on Section 8.15(b) of the Company Disclosure Letter after reasonable inquiry.

          “Law” or “Laws” has the meaning set forth in Section 3.8(a).

          “Lien” means a right of termination, cancellation or acceleration of any material obligation or to the loss of a material benefit under any loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture, lease, agreement, contract, instrument, permit, concession, franchise, right or license binding upon the Company or any of the Company’s Subsidiaries or result in the creation of any liens, claims, mortgages, encumbrances, pledges, security interests, equities or charges of any kind.

          “Merger” has the meaning set forth in the Recitals.

          “Merger Consideration” has the meaning set forth in Section 2.1(a).

          “Merger Sub” has the meaning set forth in the Preamble.

          “Minimum Condition” has the meaning set forth in Annex III.

          “Multiemployer Plan” has the meaning set forth in Section 3.10(a).

          “New Financing Commitments” has the meaning set forth in Section 5.11(a).

          “New Plans” has the meaning set forth in Section 5.5(b).

          “Offer” has the meaning set forth in Section 1A.1(a).

          “Offer Documents” has the meaning set forth in Section 1A.1(c).

          “Offer to Purchase” has the meaning set forth in Section 1A.1(c).

          “Old Plans” has the meaning set forth in Section 5.5(b).

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          “Option and Stock-Based Consideration” has the meaning set forth in Section 2.3(c).

          “Option Consideration” has the meaning set forth in Section 2.3(a).

          “Parent” has the meaning set forth in the Preamble.

          “Parent Approvals” has the meaning set forth in Section 4.2(b).

          “Parent Disclosure Letter” has the meaning set forth in Article IV.

          “Parent Material Adverse Effect” has the meaning set forth in Section 4.1.

          “Parent Representatives” has the meaning set forth in Section 5.2(a).

          “Parent Termination Fee” has the meaning set forth in Section 7.3(b).

          “Paying Agent” has the meaning set forth in Section 2.2(a).

          “Per Share Amount” has the meaning set forth in the Recitals.

          “Performance Shares” has the meaning set forth in Section 2.3(c).

          “Permitted Lien” means a Lien (A) for Taxes or governmental assessments, charges or claims of payment not yet due or being contested in good faith and, in each case, for which adequate accruals or reserves have been established in accordance with GAAP, (B) which is a carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar lien arising in the ordinary course of business, (C) which is a zoning, entitlement or other land use or environmental regulation by any Governmental Entity, (D) which is disclosed on the most recent consolidated balance sheet of the Company or notes thereto (or securing liabilities reflected on such balance sheet) or (E) which was incurred in the ordinary course of business since the date of the most recent consolidated balance sheet of the Company.

          “Person” means an individual, a corporation, a partnership, a limited liability company, an association, a trust or any other entity, group (as such term is used in Section 13 of the Exchange Act) or organization, including, without limitation, a Governmental Entity, and any permitted successors and assigns of such person.

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          “Preferred Stock” has the meaning set forth in Section 3.2(a).

          “Prior Merger Agreement” has the meaning set forth in the Recitals.

          “Private Placement Notes” means the Company’s (i) 6.28% Senior Notes due November 15, 2014, (ii) 4.69% Senior Notes due July 15, 2007, (iii) 6.99% Senior Notes due June 15, 2009 and (iv) 7.49% Senior Notes due June 15, 2012.

          “Proxy Statement” has the meaning set forth in Section 3.13(b).

          “Qualifying Transaction” has the meaning set forth in Section 7.3(a).

          “Recommendation” has the meaning set forth in Section 3.4(a).

          “Representatives” has the meaning set forth in Section 5.3(a).

          “Restricted Shares” has the meaning set forth in Section 2.3(b).

          “Rights” means the preferred stock purchase rights outstanding pursuant to the Rights Agreement.

          “Rights Agreement” has the meaning set forth in the Recitals.

          “Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002, as amended.

          “Schedule 14D-9” has the meaning set forth in Section 1A.2(b).

          “Schedule TO” has the meaning set forth in Section 1A.1(c).

          “SEC” means the Securities and Exchange Commission.

          “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

          “Share” has the meaning set forth in the Recitals.

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          “Short Form Merger” has the meaning set forth in Section 1.8.

          “Significant Subsidiary” has the meaning set forth in Section 3.3(a).

          “Special Committee” has the meaning set forth in the Recitals.

          “Specified Approvals” has the meaning set forth in Section 3.4(b).

          “Subsidiaries” means, with respect to any party, any corporation, partnership, association, trust or other form of legal entity of which (i) more than 50% of the outstanding voting securities are on the date hereof directly or indirectly owned by such party, or (ii) such party or any Subsidiary of such party is a general partner (excluding partnerships in which such party or any Subsidiary of such party does not have a majority of the voting interests in such partnership).

          “Superior Proposal” has the meaning set forth in Section 5.3(h).

          “Surviving Corporation” has the meaning set forth in Section 1.1.

          “Takeover Laws” has the meaning set forth in Section 1A.2(a).

          “Tax Return” has the meaning set forth in Section 3.15(j).

          “Taxes” has the meaning set forth in Section 3.15(j).

          “Tender Offer Conditions” has the meaning set forth in Section 1A.1(a).

          “Termination Date” has the meaning set forth in Section 5.1(a).

          “Termination Fee” has the meaning set forth in Section 7.3(a).

          “Top-Up Option” has the meaning set forth in Section 1A.4(a).

          “Top-Up Option Shares” has the meaning set forth in Section 1A.4(a).

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          “UBS” has the meaning set forth in Section 3.19.

          “WARN Act” has the meaning set forth in Section 3.16.

[Signature Page Follows]

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     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the date first above written.

CGEA HOLDINGS, INC.
By:	/s/ Glenn A. Youngkin
	Name:	Glenn A. Youngkin
	Title:	President
CGEA INVESTOR, INC.
By:	/s/ Glenn A. Youngkin
	Name:	Glenn A. Youngkin
	Title:	President
ELKCORP
By:	/s/ Thomas Karol
	Name:	Thomas Karol
	Title:	CEO

Annex III

     Conditions to the Offer. Notwithstanding any other provision of the Offer, Merger Sub shall not be required to accept for payment or, subject to any applicable rules and regulations of the SEC, including Rule 14e-1(c) promulgated under the Exchange Act (relating to Parent’s obligation to pay for or return tendered Shares promptly after termination or withdrawal of the Offer), pay for, and (subject to any such rules or regulations) may, to the extent expressly permitted by this Agreement, delay the acceptance for payment of any tendered Shares if (i) there shall not have been validly tendered and not withdrawn prior to the expiration of the Offer a number of Shares which represents more than one-half of the number of Shares outstanding on a fully diluted basis (which shall mean, for purposes of this Annex III, as of any time, the number of Shares then outstanding, together with all Shares then issuable pursuant to outstanding Company Stock Options and Performance Shares immediately prior to the expiration of the Offer which in the case of Performance Shares shall be deemed to be earned at the maximum target level set forth in the applicable Company Stock Plan and applicable award agreement assuming that the Offer is completed, in each case whether vested or unvested) (the “Minimum Condition”) or (ii) at any time after the date of this Agreement and before the expiration of the Offer, any of the following events shall occur and be continuing:

     (a) a Governmental Entity of competent jurisdiction shall have enacted issued or entered any restraining order, preliminary or permanent injunction or similar order or legal restraint or prohibition which remains in effect that enjoins or otherwise prohibits consummation of the Offer or the Merger;

     (b) this Agreement shall have been terminated by the Company, Merger Sub or Parent in accordance with its terms;

     (c) (i) any of the representations and warranties of the Company set forth in Section 3.2(a) and (b) and 3.20 shall not be true and correct in all respects (except, in the case of Sections 3.2(a) and (b), for such inaccuracies as are de minimis in the aggregate), in each case at and as of the date of this Agreement and at and as of the Expiration Date as though made at and as of the Expiration Date (except to the extent expressly made as of an earlier date, in which case as of such date), or (ii) any of the other representations and warranties of the Company set forth herein shall not be true and correct in each case at and as of the date of this Agreement and at and as of the Expiration Date as though made at and as of the Expiration Date (except to the extent expressly made as of an earlier date, in which case as of such date), except where the failure of such representations and warranties to be so true and correct would not have, individually or in the aggregate, a Company Material Adverse Effect;

     (d) the Company shall not have in all material respects performed all obligations and complied with all covenants required by this Agreement to be performed or complied with by it

prior to the Expiration Date and such failure to perform shall not have been cured prior to the Expiration Date; or

     (e) any Company Material Adverse Effect.

     Subject to the terms of this Agreement, the foregoing conditions are for the sole benefit of Merger Sub and may be asserted by Merger Sub regardless of the circumstances (including any action or inaction by Parent or Merger Sub, other than action or inaction in breach of this Agreement, including the failure to have used such efforts as may be required by Section 5.6) giving rise to any such conditions and may be waived by Merger Sub in whole or in part at any time and from time to time, in each case except for the Minimum Condition, in the exercise of the reasonable good faith judgment of Merger Sub and subject to the terms of this Agreement, including, without limitation, Section 1A.1(b). The failure by Merger Sub at any time to exercise any of the foregoing rights shall not be deemed a waiver of any such right and each such right shall be deemed an ongoing right which may be asserted at any time and from time to time.

EX-99.(D)(1)(B)

Exhibit (d)(1)(B)

As of October 11, 2006

CONFIDENTIAL

CGEA Holdings, Inc.
CGEA Investor, Inc.
Carlyle Investment Management L.L.C.
1001 Pennsylvania Ave, NW
Suite 220 South
Washington DC 20004

Amended and Restated Confidentiality Agreement

     Ladies and Gentlemen:

     Reference is hereby made to (i) the Confidentiality Agreement, dated October 11, 2006 (the “Confidentiality Agreement”), between ElkCorp (the “Company”) and Carlyle Investment Management L.L.C. and (ii) the Agreement and Plan of Merger, dated as of December 18, 2006 (the “Merger Agreement”), by and among CGEA Holdings, Inc. (“Parent”), CGEA Investor, Inc. (“Merger Sub”) and the Company. In consideration of the consent of Parent and Merger Sub to the Company’s request to enter into that Confidentiality Agreement, dated December 29, 2006, by and among the Company, Heyman Investment Associates Limited Partnership and Building Materials Corporation of America having the terms set forth in such agreement, the Company and you hereby agree to amend and restate the Confidentiality Agreement as set forth in this letter agreement. This letter agreement amends and restates the Confidentiality Agreement and as so amended and restated shall be deemed to be the Confidentiality Agreement referred to in Sections 5.2(b) and Section 8.10 of the Merger Agreement.

     You have requested information from the Company, in connection with your consideration of a possible negotiated transaction between the Company and you (the “Transaction”) pursuant to the Merger Agreement and any potential New Offer (as such term is defined below). As a condition to furnishing such information to you, you agree, as set forth below, to treat confidentially any information (whether prepared by the Company, its Representatives or otherwise, whether in oral, written, electronic or other form, and whether prepared before, on or after the date hereof) that the Company or its Representatives, furnish (or have furnished) to you or your Representatives (such information being collectively referred to herein as the “Evaluation Material”) and to take or abstain from taking certain other actions set forth herein. The term “Evaluation

Material” shall be deemed to include, without limitation, notes, analyses, compilations, summaries, data, studies, interpretations, forecasts, records, memoranda or other documents or information prepared by you or your Representatives which contain, reflect or are based on, in whole or in part, any Evaluation Material. The term “Evaluation Material” shall not be deemed to include information that (i) is already in your possession, provided that such information is not known by you to be subject to another confidentiality agreement with or other obligation of secrecy to the Company or another party, (ii) becomes generally available to the public other than as a result of a disclosure by you or your Representatives, (iii) becomes available to you on a non-confidential basis from a source other than the Company or its Representatives, provided that you do not have reason to believe that such source is bound by a confidentiality agreement with or other obligation of secrecy to the Company or another party, or (iv) you can demonstrate was independently developed by you or on your behalf without violation of any of your obligations hereunder and without reference to any Evaluation Material.

     You hereby agree that the Evaluation Material will be used by you or your Representatives solely for the purpose of evaluating a possible acquisition by you of the Company or a New Offer, will not be used in any way directly or indirectly detrimental to the Company, or for any other purpose, and will be kept confidential by you and your Representatives and will not be disclosed by you or any of your Representatives to any other person; provided, however, that any of such information may be disclosed to your Representatives who (i) need to know such information for the sole purpose of evaluating any such possible transaction between the Company and you, (ii) are informed by you of the confidential nature of such information and (iii) agree to keep such information confidential and to be bound by this letter agreement to the same extent as if they were parties hereto. You hereby agree that you will be responsible for any breach of this letter agreement by your Representatives, and that the Company shall be entitled to directly enforce such agreements (it being understood that such responsibility shall be in addition to and not by way of limitation of any right or remedy the Company may have against your Representatives with respect to such breach). You understand that some Evaluation Material deemed competitively sensitive may, and Evaluation Material related to product pricing shall, if provided, be designated for review solely by your outside advisors or by those of your employees whose responsibilities do not include contacting customers or potential customers or the determination of product pricing, and you agree to, and to cause your Representatives to, abide by such designation.

     In addition, without the prior written consent of the Company, you will not, and will cause your Representatives not to, discuss with or offer to any third party (other than Hood Companies, Inc. and its subsidiaries (“Hood”)) an equity participation in a possible transaction or any other form of joint acquisition by you and a third party (other than Hood), or enter into any agreement relating to the foregoing.

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     In the event that you or your Representatives receive a request to disclose all or any part of the information contained in the Evaluation Material under the terms of a valid and effective subpoena or order issued by a court of competent jurisdiction or by a governmental body or are required by applicable law, rule or regulation to disclose such Evaluation Material in connection with the Merger Agreement or a New Offer (as defined below), you agree (x) in the case of such a request, to (i) to the extent permitted by law, promptly notify the Company in writing of the existence, terms and circumstances surrounding such a request, so that it may seek an appropriate protective order and/or waive your compliance with the provisions of this letter agreement (and, if the Company seeks such an order, to provide such cooperation as the Company shall reasonably request) and (ii) if such protective order or other remedy is not obtained or the Company waives compliance with the provisions of this letter agreement, and if disclosure of such information is required in the opinion of your counsel, who shall be reasonably satisfactory to the Company, disclose only that portion of the Evaluation Material that is legally required to be disclosed in the opinion of such counsel and exercise your reasonable best efforts to obtain an order or other reliable assurance that confidential treatment will be accorded to such of the disclosed information which the Company so designates, and (y) in the case of such a requirement to promptly notify the Company of any such required disclosure and to reasonably cooperate with the Company to agree on the nature of such disclosure; provided, that in the absence of such an agreement, you may disclose such of the Evaluation Material as would be required in the opinion of your counsel, who shall be reasonably satisfactory to the Company, to be disclosed in a proxy statement of the Company for a merger by an acquiror possessing such Evaluation Material.

     During the course of your evaluation, all inquiries and other communications in connection with a possible negotiated Transaction are to be made directly to Thomas Karol, Chief Executive Officer of the Company, or through UBS Investment Bank (primary contact: Lee Lebrun, 212.821.4269), or Wachtell, Lipton, Rosen & Katz (“WLRK”) (primary contact: Mark Gordon, 212.403.1343). Until the Standstill Termination Date (as defined below) except with the express written permission of the Company, you will not, and will cause your Representatives not to, initiate or maintain contact with any officer (other than Mr. Karol or Mr. Richard Nowak, the Chief Operating Officer of the Company), employee, agent, or affiliate of the Company or any of its subsidiaries regarding the Company or any of its subsidiaries or their respective operations, assets, prospects or finances, or seek any information from such person, in each case in connection with a possible Transaction. Subject to your compliance with the restrictions of the next paragraph (when applicable to you), you may contact directors of the Company in connection with a possible Transaction.

     You hereby acknowledge that the Evaluation Material is being furnished to you in consideration of your agreement, and you hereby agree, subject to the following paragraph, that from the date hereof until the earlier of: (A) six (6) months from the date

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of this letter agreement or (B) if the Company advances the Company Proposal Date (as defined below) to a date that is earlier than six months from the date of this letter agreement, the fifth business day prior to such new, earlier Company Proposal Date, increasing the conditions to closing or extending the time for performance (such earlier date, the “Standstill Termination Date”), unless specifically invited in writing by the Company, neither you nor any of your Representatives will in any manner, directly or indirectly: (a) effect or seek, offer or propose (whether publicly or otherwise) to effect, or participate in, facilitate or encourage any other person to effect or seek, offer or propose (whether publicly or otherwise) to effect or participate in, (i) any acquisition of any securities (or beneficial ownership thereof), or rights or options to acquire any securities (or beneficial ownership thereof), or any assets, indebtedness or businesses of the Company or any of its subsidiaries, other than acquisitions not in excess of, in the aggregate, 2% of such securities, (ii) any tender offer or exchange offer, merger or other business combination involving the Company, any of the subsidiaries or assets of the Company or the subsidiaries constituting a significant portion of the consolidated assets of the Company and its subsidiaries, (iii) any recapitalization, restructuring, liquidation, dissolution or other extraordinary transaction with respect to the Company or any of its subsidiaries, or (iv) any “solicitation” of “proxies” (as such terms are used in the proxy rules of the Securities and Exchange Commission) or consents to vote any voting securities of the Company, including soliciting consents or taking other action with respect to the calling of a special meeting of the Company’s shareholders; (b) form, join or in any way participate in a “group” (as defined under the Exchange Act) with respect to the Company; (c) otherwise act, alone or in concert with others, to seek representation on or to control or influence the management, Board of Directors or policies of the Company or to obtain representation on the Board of Directors of the Company; (d) disclose or direct any person to disclose, any intention, plan or arrangement inconsistent with the foregoing; (e) take any action that could reasonably be expected to result in a request to disclose all or any part of the information contained in the Evaluation Material by a court of competent jurisdiction or by a governmental body; or (f) advise, assist or encourage or direct any person to advise, assist or encourage any other persons in connection with any of the foregoing. You also agree during such period not to request the Company or any of its Representatives, directly or indirectly to amend or waive any provision of this paragraph (including this sentence). Your association with Hood in connection with your consideration of a transaction shall not be deemed to violate the terms of this paragraph. For the avoidance of doubt, this standstill provision shall not apply to any investment fund focused on high yield or fixed income securities managed or sponsored by you unless you disclose Evaluation Material to such investment fund. The Company has publicly announced that advance notice of any shareholder proposals for business to be conducted at the Company’s 2007 annual meeting of stockholders must be given by a proposing shareholder by August 1, 2007. Such deadline is referred to herein as the “Company Proposal Date”.

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     The preceding paragraph notwithstanding, (1) you will not be deemed to be in breach of the preceding paragraph by virtue of any action taken by you that is permitted under the Merger Agreement or by the announcement, commencement, maintenance, amendment and/or extension by you or your affiliates of an acquisition offer, whether by way of a tender or exchange offer, merger or otherwise (a “New Offer”); provided that the terms of the New Offer (including any extension or amendment thereof) shall in no event (A) provide for a per share consideration that is less than the Merger Consideration or (B) otherwise contain terms and conditions that in the aggregate are materially less favorable to the Company’s shareholders than the terms and conditions set forth in the Merger Agreement, provided that an extension of the expiration date of a New Offer shall not be deemed to be an adverse change; and (2) you will not be deemed to be in breach of the preceding paragraph by virtue of the taking of any action otherwise prohibited by such provisions so long as any such action is taken during the time that such New Offer is pending and open.

     In consideration of the Evaluation Material being furnished to you, you also hereby agree that, for the period of two years from the date hereof, neither you nor any of your Representatives will solicit for employment, or employ, any of the officers or employees of the Company or its affiliates without obtaining the prior written consent of the Company; provided, however, that you and your Representatives may engage in general solicitations (and employ pursuant to such solicitations) for employees in the ordinary course of business and consistent with past practice and that you and your Representatives may solicit or employ any officer or employee of the Company or its affiliates six months after such person’s employment with the Company or its affiliate, as the case may be, has terminated.

     You understand that, except as set forth in the Merger Agreement, neither the Company nor any of its Representatives have made or make any representation or warranty as to the accuracy or completeness of the Evaluation Material and that nothing contained in any discussions between the Company or any of its Representatives and you or any of your Representatives shall be deemed to constitute a representation or warranty. You agree that neither the Company nor its Representatives shall have any liability to you or any of your Representatives resulting from the use or content of the Evaluation Material or from any action taken or any inaction occurring in reliance on the Evaluation Material, except as may be included in the Merger Agreement or any other definitive agreement which provides for any transaction between the Company and you.

     At the request of the Company in its sole discretion and for any reason, or on your own initiative if you decide not to proceed with a possible transaction, you will promptly (and in no event later than five business days after the request therefor) deliver to the Company or destroy (including, to the extent practicable, expunging all such Evaluation Material from any computer, word processor or other device containing such information) all Evaluation Material (whether prepared by the Company or its

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Representatives), including all documents, memoranda, notes and other writings whatsoever prepared by you or your Representatives based on the information in the Evaluation Material, and cause your Representatives to do the same and you shall provide the Company with written confirmation of destruction. Notwithstanding the foregoing, you and your Representatives may retain one copy if and to the extent required in order to satisfy any law, rule or regulation to which you are subject. The return or destruction of the Evaluation Material notwithstanding, you and your Representatives will continue to be bound by your obligations of confidentiality and other obligations hereunder.

     You hereby acknowledge that you are aware, and that you will advise your Representatives who are informed as to the matters which are the subject of this letter agreement, that the United States securities laws prohibit any person who has received from an issuer material, non-public information concerning the matters which are the subject of this letter agreement from purchasing or selling securities of such issuer or from communicating such information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities.

     It is further understood and agreed that no failure or delay by a party in exercising any right, power or privilege under this letter agreement shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power or privilege hereunder. This letter agreement and the Merger Agreement represent the entire understanding of the parties with respect to the matters referred to in this letter agreement and supersede all prior understandings, written or oral, between the parties with respect to such matters. The agreements set forth in this letter agreement may be modified or waived only by a separate writing between the Company and you expressly so modifying or waiving such agreements.

     The parties hereto acknowledge that money damages are an inadequate remedy for breach of this letter agreement because of the difficulty of ascertaining the amount of damage that will be suffered by the Company in the event that this agreement is breached. Therefore, you agree that the Company may obtain specific performance of this agreement and injunctive or other equitable relief as a remedy for any such breach, and you further waive any requirement for the securing or posting of any bond in connection with any such remedy. Such remedy shall not be deemed to be the exclusive remedy for your breach of this letter agreement, but shall be in addition to all other remedies available at law or equity to the Company. If any term, provision, covenant or restriction of this letter agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this letter agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

     As used in this letter agreement, (i) the term “person” will be interpreted broadly to include, without limitation, the media (electronic, print or otherwise), the Internet, any governmental representative or authority or any corporation, company, group,

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partnership, limited liability company, other entity or individual, (ii) the term “Representatives,” used with respect to a person, shall include its affiliates and the directors, officers, employees, representatives, agents, attorneys, accountants, financial advisors and other advisors, and banks and other debt financing sources of or to such person or its affiliates, but, without the prior written consent of the Company, shall exclude any potential source of equity capital (other than Hood), (iii) the term “affiliate” when used with respect to a person, shall have the meaning given to it in Rule 12b-2 under the Exchange Act, (iv) the term “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended and (v) the term “change of control” shall mean (a) a sale or transfer of all or substantially all of the assets or stock of the Company or (b) a merger or other business combination to which the Company is a party, except for a merger or other business combination where the Company is the surviving corporation and, after giving effect to such merger, the holders of the Company’s outstanding capital stock (on a fully-diluted basis) immediately prior to the merger will own, immediately following the merger, capital stock holding a majority of the voting power of the Company. The parties hereto agree that for purposes of this letter agreement the term “affiliate” or “Representative” shall not include any investment fund managed or sponsored by you or any portfolio investment of any investment funds of Carlyle Investment Management, L.L.C. or any of its affiliates or any director, officer, employee or agent of any portfolio investment unless any director, officer, employee or agent of that portfolio investment is provided access to the Evaluation Material or Transaction Information.

     This letter agreement shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the principles of conflict of laws thereof. You irrevocably submit to (i) the exclusive jurisdiction of New York state courts and any federal court sitting in the City and State of New York for purposes of any suit, action or other proceeding arising out of this letter agreement, or of the transactions contemplated hereby, that is brought by or against you, and (ii) the exclusive venue of such suit, action or proceeding in the City and State of New York.

     Except as provided in the following sentence, this letter agreement and all obligations of the parties hereunder shall terminate two (2) years from the date hereof. Notwithstanding anything in this letter agreement to the contrary, you agree that all of your obligations will survive and continue: (a) with respect to Evaluation Material other than Trade Secret Technology Information, for a period of three (3) years from the date hereof, and (b) with respect to Trade Secret Technology Information for so long as such information retains its status as a trade secret. For purposes of this agreement, “Trade Secret Technology Information” means Evaluation Material without regard to form which is not commonly known by or available to the public and which information (i) relates to proprietary inventions, know-how, technology, processes or products of the Company, (ii) derives economic value, actual or potential, from not being known to and not being readily ascertainable by proper means by other persons who can obtain

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economic value from its disclosure or use, (iii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy, and (iv) is designated as a trade secret by the Company to you by labeling such written information “trade secret” or designating oral information or information conveyed by observation as “trade secret” in writing within thirty (30) days after disclosure of the trade secret to you.

[Signature page follows]

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     If you are in agreement with the foregoing, please so indicate by signing and returning one copy of this letter agreement, which will constitute our agreement with respect to the matters set forth herein.

Very truly yours, ElkCorp
By:	/s/ Thomas D. Karol
	Name:	Thomas D. Karol
	Title:	Chairman of the Board and Chief Executive Officer

Confirmed and Agreed to:

Carlyle Investment Management LLC
By:	/s/ Sameer Bhargava
	Name:	Sameer Bhargava
	Title:	Principal
CGEA Holdings, Inc.
By:	/s/ Sameer Bhargava
	Name:	Sameer Bhargava
	Title:	Vice President
CGEA Investor, Inc.
By:	/s/ Sameer Bhargava
	Name:	Sameer Bhargava
	Title:	Vice President

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EX-99.(D)(1)(C)

Exhibit (d)(1)(C)

AMENDED AND RESTATED GUARANTEE
OF
CARLYLE PARTNERS IV, L.P.

     GUARANTEE, dated as of January 15, 2007 (this “Guarantee”), by Carlyle Partners IV, L.P. (the “Guarantor”), in favor of ElkCorp, a Delaware corporation (the “Company”).

     1. GUARANTEE. To induce the Company to enter into that certain Amended and Restated Agreement and Plan of Merger, dated as of January 15, 2007 (as amended, supplemented or otherwise modified from time to time, the “Merger Agreement”), by and among the Company, CGEA Holdings, Inc. a Delaware corporation (“Parent”), and CGEA Investor Inc., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Sub”), pursuant to which Merger Sub will commence a tender offer (the “Offer”) to purchase all outstanding shares of common stock, par value $1.00 per share, of the Company, and following the consummation of the Offer, merge with and into the Company, the Guarantor absolutely, unconditionally and irrevocably guarantees to the Company, the due and punctual observance, payment, performance and discharge of the obligation of Parent and Merger Sub to pay (a) the Parent Termination Fee pursuant to Section 7.3 of the Merger Agreement, (b) the Company Financing Expenses, and (c) the Company Note Repurchase Expenses (as such terms are defined in the Merger Agreement) to the Company (the “Obligations”); provided that notwithstanding anything to the contrary set forth herein, the maximum amount payable by the Guarantor under this Guarantee shall not exceed $35 million plus any amount payable pursuant to Section 11 of this Guarantee (the “Cap”), it being understood that this Guarantee may not be enforced without giving effect to the Cap. This Amended and Restated Guarantee amends and restates the Guarantee dated as of December 18, 2006 among the parties hereto and as so amended and restated shall be deemed to be the Guarantee referred to in Section 4.6 of the Merger Agreement.

     2. NATURE OF GUARANTEE. The Company shall not be obligated to seek payment of the Obligations from Parent or Merger Sub or file any claim relating to the Obligations in the event that Parent or Merger Sub becomes subject to a bankruptcy, reorganization or similar proceeding, and the failure of the Company to seek such payment or to so file shall not affect the Guarantor’s obligations hereunder. In the event that any payment to the Company in respect of any Obligations is rescinded or must otherwise be returned for any reason whatsoever, the Guarantor shall remain liable hereunder with respect to such Obligations as if such payment had not been made. This is an unconditional guarantee of payment and not of collectibility. The Guarantor reserves the right to assert defenses which Parent or Merger Sub may have to payment of any Obligations that arise under the terms of the Merger Agreement.

     3. CHANGES IN OBLIGATIONS, CERTAIN WAIVERS. The Guarantor agrees that the Company may at any time and from time to time, without notice to or further consent of the Guarantor, extend the time of payment of any of the Obligations, and may also make any agreement with Parent or Merger Sub for the extension, renewal, payment, compromise, discharge or release thereof, in whole or in part, or for any modification of the terms thereof or of any agreement between the Company and Parent or Merger Sub or any such other Person without in any way impairing or affecting this Guarantee. The Guarantor agrees that the obligations of the Guarantor hereunder shall not be released or discharged, in whole or in part, or otherwise affected by (a) the failure of the Company to assert any claim or demand or to enforce any right or remedy against Parent or Merger Sub or any other entity or person liable with respect to any of the Obligations; (b) any change in the time, place or manner of payment of any of the Obligations or any rescission, waiver, compromise, consolidation or other amendment or modification of any of the terms or provisions of the Offer, the Merger Agreement or any other agreement evidencing, securing or otherwise executed in connection with any of the Obligations; (c) the addition, substitution or release of any other entity or person liable with respect to any of the Obligations; (d) any change in the corporate existence, structure or ownership of Parent or Merger Sub or any other entity or person liable with respect to any of the Obligations; (e) any insolvency, bankruptcy, reorganization, or other similar proceeding affecting Parent or Merger Sub or any other entity or person liable with respect to any of the Obligations; (f) the existence of any claim, set-off or other rights which the Guarantor may have at any time against Parent, Merger Sub or the Company, whether in connection with the Obligations or otherwise; or (g) the adequacy of any other means the Company may have of obtaining payment of the Obligations. To the fullest extent permitted by law, the Guarantor hereby expressly waives any and all rights or defenses arising by reason of any law which would otherwise require any election of remedies by the Company. The Guarantor waives promptness, diligence, notice of the acceptance of this Guarantee and of the Obligations, presentment, demand for payment, notice of non-performance, default, dishonor and protest, notice of any Obligations incurred and all other notices of any kind (except for notices to be provided to Parent and Merger Sub in accordance with Section 8.7 of the Merger Agreement), all defenses which may be available by virtue of any valuation, stay, moratorium law or other similar law now or hereafter in effect, any right to require the marshalling of assets of the Parent or Merger Sub or any other entity or other person liable with respect to any of the Obligations, and all suretyship defenses generally (other than fraud by the Company or any of its Subsidiaries or defenses to the payment of the Obligations that are available to Parent or Merger Sub under the terms of the Merger Agreement or breach by the Company of this Guarantee). The Guarantor acknowledges that it will receive substantial direct and indirect benefits from the transactions contemplated by the Offer and the Merger Agreement and that the waivers set forth in this Guarantee are knowingly made in contemplation of such benefits. Notwithstanding anything to the contrary contained in this Guarantee, the Company hereby agrees that to the extent Parent and Merger Sub are relieved of their obligations with respect to the Parent Termination Fee,

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the Company Financing Expenses or the Company Note Repurchase Expenses, the Guarantor shall be similarly relieved of its Obligations under this Guarantee but only to the same extent.

     The Guarantor hereby unconditionally and irrevocably waives, and agrees not to exercise, any rights that it may now have or hereafter acquire against Parent or Merger Sub that arise from the existence, payment, performance, or enforcement of the Guarantor’s obligations under or in respect of this Guarantee, including, without limitation, any right of subrogation, reimbursement, exoneration, contribution or indemnification and any right to participate in any claim or remedy of the Company against Parent or Merger Sub, whether or not such claim, remedy or right arises in equity or under contract, statute or common law, including, without limitation, the right to take or receive from Parent or Merger Sub, directly or indirectly, in cash or other property or by setoff or in any other manner, payment or security on account of such claim, remedy or right, unless and until all of the Obligations and any amounts payable pursuant to Section 11 of this Guarantee shall have been paid in full in cash. If any amount shall be paid to the Guarantor in violation of the immediately preceding sentence at any time prior to the payment in full in cash of the Obligations and any amounts payable pursuant to Section 11 of this Guarantee, such amount shall be received and held in trust for the benefit of the Company, shall be segregated from other property and funds of the Guarantor and shall forthwith be paid or delivered to the Company in the same form as so received (with any necessary endorsement or assignment) to be credited and applied to the Obligations and any amounts payable pursuant to Section 11 of this Guarantee, in accordance with the terms of the Merger Agreement, whether matured or unmatured, or to be held as collateral for any Obligations or other amounts payable pursuant to Section 11 of this Guarantee thereafter arising.

     4. NO WAIVER; CUMULATIVE RIGHTS. No failure on the part of the Company to exercise, and no delay in exercising, any right, remedy or power hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by the Company of any right, remedy or power hereunder preclude any other or future exercise of any right, remedy or power hereunder. Each and every right, remedy and power hereby granted to the Company or allowed it by law or other agreement shall be cumulative and not exclusive of any other, and may be exercised by the Company at any time or from time to time.

     5. REPRESENTATIONS AND WARRANTIES. The Guarantor hereby represents and warrants that:

     (a) the execution, delivery and performance of this Guarantee have been duly authorized by all necessary action and do not contravene any provision of the Guarantor’s partnership agreement, operating agreement or similar organizational documents or any law, regulation, rule, decree, order, judgment or contractual restriction binding on the Guarantor or its assets;

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     (b) all consents, approvals, authorizations and permits of, filings with and notifications to, any governmental authority necessary for the due execution, delivery and performance of this Guarantee by the Guarantor have been obtained or made and all conditions thereof have been duly complied with, and no other action by, and no notice to or filing with, any governmental authority or regulatory body is required in connection with the execution, delivery or performance of this Guarantee;

     (c) this Guarantee constitutes a legal, valid and binding obligation of the Guarantor enforceable against the Guarantor in accordance with its terms, subject to (i) the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or other similar laws affecting creditors’ rights generally, and (ii) general equitable principles (whether considered in a proceeding in equity or at law); and

     (d) Guarantor has the financial capacity to pay and perform its obligations under this Guarantee, and all funds necessary for the Guarantor to fulfill its Obligations under this Guarantee shall be available to the Guarantor for so long as this Guarantee shall remain in effect in accordance with Section 8 hereof.

     6. NO ASSIGNMENT. Neither the Guarantor nor the Company may assign its rights, interests or obligations hereunder to any other person (except by operation of law) without the prior written consent of the Company or the Guarantor, as the case may be; provided, however, that the Guarantor may assign all or a portion of its obligations hereunder to an affiliate or to an entity managed or advised by an affiliate of the Guarantor, provided that no such assignment shall relieve the Guarantor of any liability or obligation hereunder except to the extent actually performed or satisfied by the assignee.

     7. NOTICES. All notices and other communications hereunder shall be in writing in the English language and shall be given (a) on the date of delivery if delivered personally, (b) on the first business day following the date of dispatch if delivered by a nationally recognized next-day courier service, (c) on the fifth business day following the date of mailing if delivered by registered or certified mail (postage prepaid, return receipt requested) or (d) if sent by facsimile or electronic transmission, when transmitted and receipt is confirmed. All notices to the Guarantor hereunder shall be delivered as set forth below:

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Attention:	Glenn A. Youngkin
Address:	Carlyle Partners IV, L.P.
	c/o The Carlyle Group
	1001 Pennsylvania Avenue, NW
	Suite 220 South
	Washington, DC 20004-2505
Facsimile No.:	(202) 347-1818
with a copy to:
Attention:	Paul S. Bird
Address:	Debevoise & Plimpton LLP
	919 Third Avenue
	New York, NY 10022
Facsimile No.:	(212) 909-6836

or to such other address or facsimile number as the Guarantor shall have notified the Company in a written notice delivered to the Company in accordance with the Merger Agreement. All notices to the Company hereunder shall be delivered as set forth in the Merger Agreement.

     8. CONTINUING GUARANTEE. This Guarantee shall remain in full force and effect and shall be binding on the Guarantor, its successors and assigns until the Obligations are satisfied in full. Notwithstanding the foregoing, this Guarantee shall terminate and the Guarantor shall have no further obligations under this Guarantee as of the earlier of (i) the Effective Time (as defined in the Merger Agreement) and (ii) the first anniversary of any termination of the Merger Agreement in accordance with its terms, except as to a claim for payment of any Obligation presented by the Company to Parent, Merger Sub or the Guarantor by such first anniversary. Notwithstanding the foregoing, in the event that the Company or any of its affiliates asserts in any litigation or other proceeding that the provisions of Section 1 hereof limiting the Guarantor’s liability to the Cap or the provisions of this Section 8 or Section 9 hereof are illegal, invalid or unenforceable in whole or in part, or asserts any theory of liability against any Affiliate (as hereinafter defined) or, other than its right to recover from Guarantor for up to the amount of the Obligations (subject to the Cap and the other limitations described herein) and other than a suit against Parent or Merger Sub for declaratory relief in connection with obtaining payment hereunder from Guarantor, Parent or Merger Sub, with respect to

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the transactions contemplated by the Offer, the Merger Agreement, then (i) the obligations of the Guarantor under this Guarantee shall terminate ab initio and be null and void, (ii) if the Guarantor has previously made any payments under this Guarantee, it shall be entitled to recover such payments and (iii) neither the Guarantor nor any of its Affiliates shall have any liability to the Company with respect to the transactions contemplated by the Offer, the Merger Agreement or under this Guarantee; provided, however, that if the Guarantor asserts in any litigation or other proceeding that this Guarantee is illegal, invalid or unenforceable in accordance with its terms, then, to the extent the Company prevails in such litigation or proceeding, the Guarantor shall pay on demand all reasonable fees and out of pocket expenses of the Company in connection with such litigation or proceeding.

     9. NO RECOURSE.

     (a) The Company acknowledges that the sole assets of Parent and Merger Sub are cash in a de minimus amount and its rights under the Merger Agreement, and that no additional funds are expected to be contributed to Parent or Merger Sub unless and until the Closing occurs. Notwithstanding anything that may be expressed or implied in this Guarantee or any document or instrument delivered contemporaneously herewith, and notwithstanding the fact that the Guarantor may be a partnership, by its acceptance of the benefits of this Guarantee, the Company acknowledges and agrees that it has no right of recovery against, and no liability shall attach to, the former, current or future stockholders, directors, officers, employees, agents, affiliates, (other than Parent or Merger Sub in connection with a suit for declaratory relief as aforesaid) members, managers, general or limited partners of the Guarantor, Parent or Merger Sub or any former, current or future stockholder, director, officer, employee, general or limited partner, member, manager, affiliate, (other than Parent or Merger Sub in connection with a suit for declaratory relief as aforesaid) of any of the foregoing (collectively, but not including Guarantor, Parent or Merger Sub, each an “Affiliate”), or, other than its right to recover from Guarantor for up to the amount of the Obligations (subject to the Cap and the other limitations described herein) and other than Parent or Merger Sub in connection with a suit for declaratory relief in connection with obtaining payment hereunder from Guarantor, Parent or Merger Sub, through Parent, Merger Sub or otherwise, whether by or through attempted piercing of the corporate, partnership or limited liability company veil, by or through a claim by or on behalf of Parent or Merger Sub against an Affiliate, Guarantor, Parent or Merger Sub (including a claim to enforce the commitment letter dated as of the date hereof from the Guarantor to Parent) arising under, or in connection with, the Offer, the Merger Agreement or the transactions contemplated thereby or otherwise relating thereto, by the enforcement of any assessment or by any legal or equitable proceeding, by virtue of any statute, regulation or applicable law, or otherwise. The Company hereby covenants and agrees that it shall not institute, directly or indirectly, and shall cause its respective affiliates not to institute, any proceeding or bring any other claim arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby or

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otherwise relating thereto, against an Affiliate or, other than its right to recover from Guarantor for up to the amount of the Obligations (subject to the Cap and the other limitations described herein) and other than Parent or Merger Sub in connection with a suit for declaratory relief in connection with obtaining payment hereunder from Guarantor, Parent or Merger Sub.

     (b) Recourse against the Guarantor under this Guarantee (including a suit against Parent or Merger Sub for declaratory relief in connection with obtaining payment hereunder from Guarantor) shall be the sole and exclusive remedy of the Company against the Guarantor and any of its Affiliates in respect of any liabilities or obligations arising under, or in connection with, the Merger Agreement or the transactions contemplated thereby or hereby or otherwise relating thereto or hereto. Nothing set forth in this Guarantee shall confer or give or shall be construed to confer or give to any Person other than the Guarantor and the Company (including any Person acting in a representative capacity) any rights or remedies against any Person other than the Company and the Guarantor as expressly set forth herein.

     (c) For all purposes of this Guarantee, a person shall be deemed to have pursued a claim against another person if such first person brings a legal action against such person, adds such other person to an existing legal proceeding, or otherwise asserts a legal claim of any nature against such person.

     (d) The Company acknowledges that the Guarantor is agreeing to enter into this Guarantee in reliance on the provisions set forth in this Section 9. This Section 9 shall survive termination of this Guarantee.

     10. GOVERNING LAW. This Guarantee shall be governed and construed in accordance with the laws of the State of Delaware applicable to contracts executed in and to be performed in that State. All actions arising out of or relating to this Guarantee shall be heard and determined exclusively in the state or federal courts of the United States of America located in the State of Delaware. The parties hereto hereby (a) submit to the exclusive jurisdiction of the state or federal courts of the United States of America located in the State of Delaware for the purpose of any action arising out of or relating to this Guarantee brought by any party hereto, and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such action, any claim that it is not subject personally to the jurisdiction of the above-named court, that its property is exempt or immune from attachment or execution, that the action is brought in an inconvenient forum, that the venue of the action is improper, or that this Guarantee or the transactions contemplated hereby may not be enforced in or by the above-named court.

     11. EXPENSES OF ENFORCEMENT. The Guarantor agrees to pay all reasonable out-of-pocket fees and expenses (including the reasonable fees and expenses of the Company’s counsel) incurred by the Company in connection with the enforcement of the rights of the Company hereunder; provided, that the Guarantor shall not be liable

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for expenses of the Company under this Section 11 if it is finally determined by a court of competent jurisdiction that no payment under this Guarantee is due provided, further, that the obligation of the Guarantor under this Section 11 shall not exceed $500,000. The Company agrees to pay all reasonable out-of-pocket fees and expenses (including the reasonable fees and expenses of the Guarantor’s counsel) incurred by the Guarantor in connection with the defense and enforcement of the rights of the Guarantor hereunder; provided, that the Company shall not be liable for any expenses of the Guarantor under this Section 11 if it is finally determined by a court of competent jurisdiction that any payment under this Guarantee is due, and provided, further, that the obligation of the Company hereunder shall not exceed $500,000.

     12. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS GUARANTEE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY.

     13. COUNTERPARTS. This Guarantee may be executed and delivered (including by facsimile transmission) in one or more counterparts, and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same instrument.

[SIGNATURE PAGE FOLLOWS]

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     IN WITNESS WHEREOF, the Guarantor and the Company have caused this Guarantee to be executed and delivered as of the date first written above by its officer thereunto duly authorized.

CARLYLE PARTNERS IV, L.P.
By:	TC Group IV, LP., its general partner
	By:  TC Group IV, L.L.C., its general partner
	By:  TC Group, L.L.C., its sole member
	By:  TCG Holdings, L.L.C., its managing member

By:	/s/ Glenn A. Youngkin
	Name:	Glenn A. Youngkin
	Title:	Managing Director

Accepted and Agreed to: ELKCORP
By:	/s/ Thomas Karol
	Name:	Thomas Karol
	Title:	CEO